How often is the Monthly Minimum Royalty Fee Requirement calculated for a Casiola franchise?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
rized and designated by us.
Your Royalty Fee obligations are subject to a minimum requirement equal to and calculated based on the following monthly minimum royalty fee requirements (the "Monthly Minimum Royalty Fee Requirement"):
Requirement1 Monthly Minimum Royalty Fee Months2 1 Territory 2 Territories 3 Territories 4 Territories 5 Territories 1 $0 $0 $0 $0 $0 – 24 25 $7,250 $14,500 $21,750 $29,000 $36,250 – 36 37 $10,875 $21,750 $32,625 $43,500 $54,375 – 48 49 $14,500 $29,000 $43,500 $58,000 $72,500 and each month thereafter 1 Monthly Fee – The fees set forth in this table are monthly fees and vary depending on the applicable month and the number of Territories.
On a quarterly basis, if the total amount of the Royalty Fees paid by your Casiola Business is less than the aggregate amount of your Monthly Minimum Royalty Fee Requirements for each month within the respective quarter, then you must pay to us and/or we may pre-deduct from your Gross Sales the difference as a supplemental royalty fee (the "Supplemental Royalty Fee").
Source: Item 6 — OTHER FEES (FDD pages 12–18)
What This Means (2024 FDD)
According to Casiola's 2024 Franchise Disclosure Document, the Monthly Minimum Royalty Fee Requirement is calculated on a monthly basis. However, Casiola assesses whether franchisees have met this requirement on a quarterly basis.
If the total royalty fees paid by a Casiola franchisee's business are less than the total Monthly Minimum Royalty Fee Requirements for each month within a quarter, the franchisee must pay the difference as a Supplemental Royalty Fee. This Supplemental Royalty Fee is the difference between the total Monthly Minimum Royalty Fee Requirements for the quarter and the total royalty fees already paid during that quarter.
For a prospective Casiola franchisee, this means that while royalty fees are calculated monthly, any shortfall isn't reconciled and due until the end of each quarter. This could create cash flow challenges if the business underperforms in certain months, as the franchisee will need to make up the difference at the end of the quarter. It's important to note that the Monthly Minimum Royalty Fee Requirement commences on the earlier of the opening of the Casiola Business or 120 days from the signing of the Franchise Agreement.