How is the Supplemental Royalty Fee for a Casiola franchise calculated?
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, a Supplemental Royalty Fee may be due. This fee is calculated on a calendar year quarterly basis. If the total Royalty Fees paid by the franchisee during a calendar quarter do not equal or exceed the total Monthly Minimum Royalty Fee Requirements for that quarter, the franchisee must pay Casiola the difference as a Supplemental Royalty Fee.
In simpler terms, Casiola franchisees must meet a minimum royalty fee each month. These monthly minimums are combined for each quarter. At the end of the quarter, if the franchisee's actual royalty payments are less than the combined minimum, they must pay the difference. This ensures Casiola receives at least the minimum royalty amount agreed upon.
The Supplemental Royalty Fee is due on the first Thursday following the end of each calendar year quarter, although Casiola can designate a different day or period for payment. This fee is in addition to the standard royalty fee, which is 4.9% of Gross Rental Revenues+, or 8% for Out of Territory Customers. Franchisees should be aware of these minimum requirements and plan their business operations accordingly to avoid incurring additional fees.