What is the method of payment a Chocolate Bash franchisee must use to pay the Royalty Fee?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchising within 15 days after invoice by CB Franchising accompanied by reasonable documentation.
4.10 Payment Terms.
- (a) Method of Payment. Franchisee shall pay the Royalty Fee, Marketing Fund Contribution, and any other amounts owed to CB Franchising by pre-authorized bank draft or in such other manner as CB Franchising may require. Franchisee shall comply with CB Franchising's payment instructions.
- (b) Calculation of Fees. Franchisee shall report monthly Gross Sales to CB Franchising by the 5th day of the following month. If Franchisee fails to report monthly Gross Sales, then CB Franchising may withdraw estimated Royalty Fees and Marketing Fund Contributions equal to 125% of the last Gross Sales reported to CB Franchising, and the parties will true-up the actual fees after Franchisee reports Gross Sales. Franchisee acknowledges that CB Franchising has the right to remotely access Franchisee's point-of-sale system to calculate Gross Sales.
- (c) Late Fees and Interest. If Franchisee does not make a payment on time, Franchisee shall pay a $100 "late fee" plus interest on the unpaid amount at a rate equal to 18% per year (or, if such payment exceeds the maximum allowed by law, then interest at the highest rate allowed by law).
- (d) Insufficient Funds. CB Franchising may charge $30 for any payment returned for insufficient funds (or, if such amount exceeds the maximum allowed by law, then the fee allowed by law).
- (e) Costs of Collection. Franchisee shall repay any costs incurred by CB Franchising (including reasonable attorney fees) in attempting to collect payments owed by Franchisee.
- (f) Application. CB Franchising may apply any payment received from Franchisee to any obligation and in any order as CB Franchising may determine, regardless of any designation by Franchisee.
- (g) Obligations Independent; No Set-Off. The obligations of Franchisee to pay to CB Franchising any fees or amounts described in this Agreement are not dependent on CB Franchi
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, a franchisee is required to pay the Royalty Fee, Marketing Fund Contribution, and any other amounts owed to CB Franchising by pre-authorized bank draft or in such other manner as CB Franchising may require. The franchisee must also comply with Chocolate Bash's payment instructions.
Chocolate Bash requires franchisees to report their monthly Gross Sales by the 5th day of the following month. If a franchisee fails to report their monthly Gross Sales, Chocolate Bash may withdraw estimated Royalty Fees and Marketing Fund Contributions equal to 125% of the last Gross Sales reported. After the franchisee reports Gross Sales, the parties will reconcile the actual fees. Chocolate Bash also has the right to remotely access the franchisee's point-of-sale system to calculate Gross Sales.
If a franchisee does not make a payment on time, they will be charged a $100 late fee plus interest on the unpaid amount at a rate of 18% per year, or the highest rate allowed by law if the 18% exceeds the legal maximum. Additionally, Chocolate Bash may charge $30 for any payment returned due to insufficient funds, or the maximum fee allowed by law if $30 exceeds that maximum. The franchisee is also responsible for repaying any costs incurred by Chocolate Bash, including reasonable attorney fees, in attempting to collect payments owed by the franchisee.