When are royalty payments due to Carbones Pizzeria?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
wenty-five Thousand Dollars ($25,000.00) (the "Franchise Fee"), payable in full upon the execution of this Agreement. It is expressly understood and agreed by the parties that the Franchise Fee is and shall be fully earned by Franchisor upon the signing of this Agreement and no part of the Franchise Fee shall be refunded to Franchisee for any reason whatsoever.
- b. In addition to the Franchise Fee, Franchisee shall pay to the Franchisor during the term of this Agreement, a "Royalty" as follows: (a) 4% of total Gross Sales on the initial $1,000,000 in Gross Sales per calendar year, at which point the Royalty is reduced to (b) 3% of Gross Sales on the next $1,000,000 per calendar year, at which point the Royalty is reduced to (c) 2% of Gross Sales over $2,000,000 in such calendar year.
- c. The Royalty shall be payable monthly on the 10th day following the end of each month. Franchisor shall aggregate its calculation of Gross Sales to include all of Franchisee's Carbone's Pizzeria restaurants during each month. Notwithstanding the foregoing, sales of alcohol by Franchisee at a facility which is a "fully licensed liquor establishment" licensed to sell alcohol shall not be included in the calculation of Gross Sales. Remittance of the Royalty shall be accompanied by reports of Gross Sales and other data upon forms provided by Franchisor from time-to-time. Any due date for payment on a non-business day shall be due the immediately following business day.
- d. Franchisor may collect all amounts due under this Agreement via electronic funds transfer/debit. Franchisee shall execute the Electronic Funds Transfer/Debit Authorization attached to this Agreement as Exhibit A. Franchisor reserves the right, without notice to Franchisee, to independently access the Restaurant's accounting and financial systems and data or any accounting or financial systems used or required by Franchisor for the Carbone System to determine Gross Sales and fees due to Franchisor under this Agreement, and Franchisee shall grant Franchisor access to all such accounting and financial systems and data.
Source: Item 23 — RECEIPTS (FDD pages 30–116)
What This Means (2025 FDD)
According to Carbones Pizzeria's 2025 Franchise Disclosure Document, royalty payments are due monthly. Specifically, the Royalty shall be payable on the 10th day following the end of each month. Carbones Pizzeria calculates Gross Sales by aggregating all of a franchisee's Carbone's Pizzeria restaurants during each month. However, sales of alcohol by the franchisee at a facility which is a "fully licensed liquor establishment" are not included in the calculation of Gross Sales.
In addition to royalty fees, franchisees must also pay an Advertising Fee of one percent (1%) of monthly Gross Sales at the same time as the royalty payment. This Advertising Fee is not due on Gross Sales exceeding $2,000,000 in any calendar year. If any payment is not remitted on time, it will accrue interest at a rate of one and a half percent (1.5%) per month until it is received by Carbones Pizzeria. However, if any applicable state law limits the maximum legal interest rate to a lower amount, then the lower interest rate will be applicable.
Any due date for payment that falls on a non-business day will be due on the immediately following business day. Carbones Pizzeria may collect all amounts due under the agreement via electronic funds transfer/debit, and the franchisee must execute the Electronic Funds Transfer/Debit Authorization attached to the agreement as Exhibit A. Carbones Pizzeria also reserves the right to independently access the Restaurant's accounting and financial systems to determine Gross Sales and fees due under the agreement.