Where in the Casiola Franchise Agreement can I find the definition of the 'Royalty Fee'?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
5.B. ROYALTY FEES AND SUPPLEMENTAL ROYALTY FEES
Royalty Fees: Throughout the Term of this Agreement, Franchisee shall pay to Franchisor continuing nonrefundable royalty fees (individually and collectively, the "Royalty 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"). 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 Casiola's 2024 Franchise Disclosure Document, the definition of 'Royalty Fee' can be found in Article 5.B of the Franchise Agreement. This section specifies that franchisees must pay continuing nonrefundable royalty fees, referred to as the "Royalty Fee," throughout the term of the agreement.
The Royalty Fee is calculated as 4.9% of Gross Rental Revenues+, with an exception: for Out of Territory Customers, the Royalty Rate is 8% of Gross Rental Revenues+. These Royalty Fees are to be paid instantly each time Gross Rental Revenues+, Gross Sales, or any other fees are received in connection with the Franchised Business.
In addition to the standard Royalty Fee, Casiola franchisees may also be subject to a Supplemental Royalty Fee. This fee is applicable on a calendar year quarterly basis if the total monthly Royalty Fees paid during that quarter do not meet or exceed the Monthly Minimum Royalty Fee Requirements. In such cases, the franchisee must pay the difference as a Supplemental Royalty Fee. The FDD specifies that the Monthly Minimum Royalty Fee Requirements will be used to calculate this supplemental fee.