Where in the Casiola Franchise Agreement can I find the definition of 'Monthly Minimum Royalty Fee Requirements'?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
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"). In calculating and determining the Supplemental Royalty Fee, the following Monthly Minimum Royalty Fee Requirements (the "Monthly Minimum Royalty Fee Requirements") shall be applicable and are imposed on Franchisee:
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to the 2024 Casiola Franchise Disclosure Document, the definition of 'Monthly Minimum Royalty Fee Requirements' can be found within Article 5.B, which discusses Royalty Fees and Supplemental Royalty Fees. Specifically, this section clarifies that if the total monthly Royalty Fees paid during a calendar year quarter do not meet or exceed the aggregate Monthly Minimum Royalty Fee Requirements for that quarter, the franchisee must pay the difference as a Supplemental Royalty Fee.
The FDD specifies that the Monthly Minimum Royalty Fee Requirements are used to calculate the Supplemental Royalty Fee. This fee is the difference between the total royalty fees paid during a calendar quarter and the total minimum royalty fee requirements for that quarter. The franchisee is obligated to pay this difference to Casiola.
For a prospective Casiola franchisee, understanding these requirements is crucial for financial planning. It's important to note that the Monthly Minimum Royalty Fee Requirement commences on the earlier of the Actual Opening Date or the Scheduled Opening Date. Franchisees should carefully review Schedule 2 of the Franchise Agreement, as it outlines the specific Monthly Minimum Royalty Fee Requirements applicable to their franchise, which may vary based on the number of territories in their Operating Market. Additionally, during any Renewal Term, Casiola can increase the Monthly Minimum Royalty Fee Requirement by no more than 10% on an annual basis.