Are Royalty Fees applicable to Casiola Wind-Down Activities?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
action, and Franchisee shall grant Franchisor 30 days from receipt of said notice to cure the alleged act upon which such legal action is to be based (hereinafter, the "30 Day Cure Notice"). Franchisee agrees that the 30 Day Cure Notice is a strict condition precedent to Franchisee commencing, or otherwise instituting, legal action or proceeding against Franchisor for any reason whatsoever.
ARTICLE 17 OBLIGATIONS UPON TERMINATION OR EXPIRATION
17.A. PAYMENT OF AMOUNTS OWED TO FRANCHISOR
Without limitation as to any other Article or provision of this Agreement, upon expiration or termination of this Agreement for any reason, Franchisee shall immediately pay to Franchisor all sums and fees due from Franchisee to Franchisor under the terms of this Agreement including, but not limited to Royalty Fees and Advertising Contributions and all other sums and fees due from Franchisee to Franchisor and/or Franchisor affiliates and/or suppliers for products and services including, but not limited to, System Supplies.
**17.B.
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to the 2024 Casiola Franchise Disclosure Document, upon the expiration or termination of the Franchise Agreement, a franchisee is obligated to pay all outstanding sums and fees to Casiola. This includes, but is not limited to, Royalty Fees, Advertising Contributions, and any other fees for products and services, such as System Supplies.
Specifically, even when a franchisee ceases regular operations, they may still be required to perform what Casiola terms "Wind-Down Activities." These activities involve completing Approved Services and Products for customers with existing rental agreements that extend beyond the termination date of the franchise agreement. During this wind-down period, the franchisee must continue to adhere to Casiola's directives.
The FDD states that franchisees must cease operating under the Casiola system upon termination or expiration, except when performing Wind-Down Activities as directed by Casiola. This implies that while conducting Wind-Down Activities, the franchisee is still considered to be operating within the Casiola system to some extent and is therefore subject to the associated financial obligations, including royalty fees. Therefore, a franchisee should anticipate paying royalty fees on revenue generated during the Wind-Down Activities period.