When are Carls franchisees required to pay royalty and advertising fees after the end of each fiscal week?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
Within 10 calendar days after the end of each fiscal week ("Due Date"), Franchisee shall pay CJR the royalty fee, and the advertising fees required by Sections 8.B and 8.C., applicable to the Gross Sales for the fiscal week and any interest charges by electronic funds transfer. In connection with payment of these fees by electronic funds transfer, CJR may designate a day for payment different than the Due Date. On each Due Date, CJR will transfer from the Franchised Restaurant's bank operating account ("Account") the amount reported to CJR in Franchisee's remittance report or determined by CJR by the records contained in the cash registers/computer terminals of the Franchised Restaurant. If Franchisee has not reported Gross Sales to CJR for any fiscal period, CJR will transfer from the Account an amount calculated in accordance with its estimate of the Gross Sales during the fiscal period. If, at any time, CJR determines that Franchisee has underreported the Gross Sales of the Franchised Restaurant, or underpaid the royalty fee or other amounts due to CJR under this Agreement, or any other agreement, CJR shall initiate an immediate transfer from the Account in the appropriate amount in accordance with the foregoing procedure, including interest as provided in this Agreement. Any overpayment will be credited to the Account effective as of the first reporting date after CJR and Franchisee determine that such credit is due.
Source: Item 22 — CONTRACTS (FDD page 80)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, franchisees must pay royalty and advertising fees within 10 calendar days after the end of each fiscal week. These payments to Carls must be made via electronic funds transfer. Carls may designate a specific day for payment that differs from the standard due date when using electronic funds transfers.
Carls will transfer the amount reported in the franchisee's remittance report, or an amount Carls determines from the restaurant's records, from the franchisee's bank operating account. If a franchisee fails to report gross sales, Carls will estimate the gross sales and transfer an amount based on that estimate. Franchisees must ensure sufficient funds are available in their account by the due date to cover these fees.
If Carls determines that a franchisee has underreported gross sales or underpaid fees, Carls can initiate an immediate transfer from the franchisee's account for the owed amount, including interest. Overpayments will be credited to the franchisee's account on the next reporting date after the credit is confirmed by both parties. Failure to maintain sufficient funds in the designated account constitutes a default of the franchise agreement.