How often is the Supplemental Royalty Fee calculated for a Casiola franchise?
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 Supplemental Royalty Fee is calculated on a calendar year quarterly basis. This means that Casiola franchisees will have their royalty fee payments assessed four times per year to determine if they meet the minimum royalty requirements.
Specifically, if the total amount of monthly Royalty Fees paid by a Casiola franchisee during a calendar year quarter does not equal or exceed the total of their Monthly Minimum Royalty Fee Requirements for that quarter, they must pay the difference as a Supplemental Royalty Fee. This calculation is done by combining the Monthly Minimum Royalty Fee Requirement for each month within the applicable calendar year quarter.
The Supplemental Royalty Fee is due on the first Thursday following the end of each calendar year quarter. However, Casiola retains the right to change this due date. This ensures that Casiola franchisees meet their minimum royalty obligations throughout the year, and it provides Casiola with a mechanism to collect any shortfall in royalty payments on a quarterly basis.