Where in the Casiola Franchise Agreement can I find the definition of 'Minimum Monthly Royalty Fee Requirement'?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
y Fee") in an amount equal to 4.9% (the "Royalty Rate") of Gross Rental Revenues+, except that the Royalty Rate shall be 8% of Gross Rental Revenues+ for Out of Territory Customers. Royalty Fees shall be paid instantly in each and every instance that Gross Rental Revenues+, Gross Sales, and/or any other fees are received and/or paid in connection with the Franchised Business.
Supplemental Royalty Fee: In addition to Franchisee's Royalty Fee obligations, on a calendar year quarterly basis throughout the Term of this Agreement, if the aggregate amount of the monthly Royalty Fees paid by Franchisee during the respective calendar year quarter do not, in aggregate, equal or exceed the aggregate amount of Franchisee's Monthly Minimum Royalty Fee Requirements (defined below) applicable to the months comprising the respective calendar year quarter (calculated by combining the Monthly Minimum Royalty Fee Requirement for each month within the applicable calendar year quarter), then Franchisee must pay to Franchisor the difference as a supplemental royalty fee (the "Supplemental Royalty Fee").
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to Casiola's 2024 Franchise Disclosure Document, the definition of 'Monthly Minimum Royalty Fee Requirements' can be found in Article 5.B of the Franchise Agreement. Specifically, this section outlines that if the aggregate amount of monthly Royalty Fees paid by the franchisee during a calendar year quarter does not equal or exceed the aggregate amount of the Monthly Minimum Royalty Fee Requirements applicable to those months, the franchisee must pay the difference as a Supplemental Royalty Fee.
This means that Casiola franchisees are obligated to meet a minimum royalty fee threshold each month. If their actual royalty fees, calculated as a percentage of gross rental revenues, fall below this minimum, they must make up the difference. This ensures that Casiola receives a baseline level of royalty income from each franchise unit, regardless of the unit's monthly revenue fluctuations.
The Monthly Minimum Royalty Fee Requirements are applicable to the franchisee, and the commencement of these minimum requirements begins on the earlier of the Actual Opening Date or the Scheduled Opening Date. This obligation continues throughout the term of the Franchise Agreement. Franchisees should carefully review Article 5.B to understand how these requirements are calculated and when supplemental payments are due, which are typically on the first Thursday following the end of each calendar year quarter.