Is there an advertising fee for Carbones Pizzeria on Gross Sales exceeding $2,000,000 in a year?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
ITEM 6. OTHER FEES
| (Column 1) Type of Fee1 | (Column 2) Amount | (Column 3) Due Date | (Column 4) Remarks |
|---|---|---|---|
| Royalty | 4% of Gross Sales on the initial $1,000,000 in Gross Sales per year, 3% of Gross Sales on the next $1,000,000 per year and 2% of Gross Sales on any additional Gross Sales over $2,000,000 per year. |
Source: Item 6 — OTHER FEES (FDD pages 8–10)
What This Means (2025 FDD)
According to Carbones Pizzeria's 2025 Franchise Disclosure Document, the advertising fee is structured as 1% of total Gross Sales up to $2,000,000 per year. The document specifies that there is no additional advertising fee for Gross Sales exceeding $2,000,000 in a year. This means that a franchisee's advertising fee is capped based on their initial sales up to the $2,000,000 threshold.
For a prospective Carbones Pizzeria franchisee, this is a favorable arrangement. It means that as their sales grow beyond $2,000,000, their advertising fee will not increase further. This can improve profitability as the business scales. The franchisee will still need to pay 1% of gross sales up to $2,000,000, but any revenue beyond that amount is not subject to the advertising fee.
Franchisors often use a percentage of gross sales to calculate advertising fees, but the specific structure can vary. Some may continue to charge a percentage across all sales levels, while others may have tiered systems or caps like Carbones Pizzeria. It is important for prospective franchisees to understand these details, as they can significantly impact the overall cost of operating the franchise.
In summary, Carbones Pizzeria's advertising fee structure provides a benefit to franchisees as their sales increase, capping the advertising fee once gross sales exceed $2,000,000 in a year. This can make the franchise opportunity more attractive for those who anticipate high sales volumes.