What is the Supplemental Royalty Fee for Casiola franchisees?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
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"). In calculating and determining the Supplemental Royalty Fee, the following Monthly Minimum Royalty Fee Requirements (the "Monthly Minimum Royalty Fee Requirements") shall be applicable and are imposed on Franchisee:
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to Casiola's 2024 Franchise Disclosure Document, franchisees may be subject to a Supplemental Royalty Fee. This fee is calculated on a calendar year quarterly basis. If the total Royalty Fees paid by the franchisee during a quarter do not meet or exceed the total Monthly Minimum Royalty Fee Requirements for that quarter, the franchisee must pay the difference to Casiola as a Supplemental Royalty Fee.
In simpler terms, Casiola requires franchisees to meet a minimum royalty payment each month. These monthly minimums are added up for each quarter. If a franchisee's actual royalty payments for that quarter fall short of the total minimum, they must make up the difference through this Supplemental Royalty Fee.
This requirement ensures that Casiola receives a baseline level of royalty income from each franchise, regardless of fluctuations in the franchisee's Gross Rental Revenues+. Prospective franchisees should carefully consider the Monthly Minimum Royalty Fee Requirements, as failing to meet them will result in additional fees payable to Casiola. It is important to understand how these minimums are calculated and what level of revenue is needed to avoid triggering the Supplemental Royalty Fee.