How are Royalty Fees typically collected for a Casiola Business?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
Note 2: Royalty Fees – You must pay to us a continuing royalty fee (the "Royalty Fee"). The continuing Royalty Fee is payable and due instantly on a per transaction basis or as otherwise directed by us and is equal to 4.9% (the "Royalty Rate") of all Gross Rental Revenues+ (defined below). The Royalty Rate is 8% of all Gross Rental Revenues+ for Out of Territory Customers. In most, if not all instances, as directed by us, the Gross Rental Revenues+ of your Casiola Business will be received directly by us or our affiliate. We are authorized to pre-deduct and pay to ourselves all Royalty Fees and other fees due from you to us from the Gross Rental Revenues+ of your Casiola Business. If any federal, state or local tax other than an income tax is imposed on the Royalty Fee which we cannot directly and, dollar for dollar, offset against taxes required to be paid under any applicable federal or state laws, you must compensate us in the manner prescribed by us so that the net amount or net effective royalty fees received by us is not less than 4.9% of your Gross Rental Revenues+.
"Ancillary Third Party Service Fees" means fees paid to a Casiola Business as reimbursement for services, parts, and supplies provided to a customer of the Casiola Business by a third party provider of ancillary services such as cleaning, plumbing, and handyman services as authorized 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"). The Supplemental Royalty Fee is calculated as the difference between the aggregate amount of the Monthly Minimum Royalty Fee Requirements applicable within the particular calendar year quarter, less the aggregate amount of the Royalty Fees that you paid to us during the respective calendar year quarter.
Note 3: Gross Rental Revenues+, Commission+ Fees, and Ancillary Third Party Service Fees
"Gross Rental Revenues+" means the total amount of all gross revenues, sales, receipts, and fees paid including, by an end-user customer and/or their agent or intermediary, in connection with the rental, leasing, property management, insuring, servicing, reserving and/or use of a property in connection with the Approved Services and Products and/or that is the subject of and/or benefits from the Approved Services and Products from or derived by you, a customer of your Casiola Business, or any other person or Corporate Entity from business conducted or which started in, on, from or through your Casiola Business and/or your Operating Market, whether such business is conducted in compliance with or in violation of the terms of the Franchise Agreement. Commission+ Fees are not deducted when calculating and determining Gross Rental Revenues+. Gross Rental Revenues+ do not include any taxes that are collected and remitted to the proper taxing authority.
Source: Item 6 — OTHER FEES (FDD pages 12–18)
What This Means (2024 FDD)
According to Casiola's 2024 Franchise Disclosure Document, the Royalty Fee is 4.9% of all Gross Rental Revenues+, but it increases to 8% for Out of Territory Customers. Casiola collects Royalty Fees either on a per-transaction basis or as otherwise directed by them. In most cases, Gross Rental Revenues+ are received directly by Casiola or its affiliate, who are authorized to pre-deduct Royalty Fees and other fees owed. If any federal, state, or local tax other than income tax is imposed on the Royalty Fee, Casiola will require the franchisee to compensate them so that the net amount received is not less than 4.9% of Gross Rental Revenues+.
Casiola franchisees must meet a Monthly Minimum Royalty Fee Requirement. If the total Royalty Fees paid are less than the aggregate 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 aggregate Monthly Minimum Royalty Fee Requirements for the quarter and the total Royalty Fees paid during that quarter.
Casiola may directly collect the Gross Sales of a franchisee's Casiola Business and pre-deduct all fees and payments due to them, their affiliates, or designated suppliers, remitting the balance to the franchisee. Casiola may also require payment directly from the franchisee, including automatic drafts from the franchisee's business bank account. Franchisees are required to sign an ACH Authorization Form permitting Casiola to electronically debit their bank account for all fees payable. Franchisees must deposit Gross Sales into designated bank accounts subject to ACH authorization and use pre-authorized payment systems designated by Casiola, bearing all associated service charges and fees.