What are the notes that apply to the royalty fee for a Chocolate Bash franchise?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty | 6% of your gross sales | Monthly by the 5th day of the following month | See Note 1 and Note 2. |
Notes
- "Gross Sales" is defined in our franchise agreement as the total dollar amount of all sales generated through your business for a given period, including, but not limited to, payment for any services or products sold by you, whether for cash or credit. Gross Sales does not include (i) bona fide refunds to customers, (ii) sales taxes collected, (iii) sale of used equipment not in the ordinary course of business, or (iv) sales of prepaid cards or similar products (but the redemption of any such card or product will be included in Gross Sales).
We currently require you to pay royalty fees and other amounts due to us by preauthorized bank draft. However, we can require an alternative payment method.
Source: Item 6 — OTHER FEES (FDD pages 9–13)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, the royalty fee is subject to two specific notes. The royalty fee is 6% of gross sales, which Chocolate Bash defines as the total dollar amount of all sales generated through your business for a given period, including payment for any services or products sold by you, whether for cash or credit. However, gross sales does not include bona fide refunds to customers, sales taxes collected, sale of used equipment not in the ordinary course of business, or sales of prepaid cards or similar products, but the redemption of any such card or product will be included in Gross Sales.
The royalty fees are due monthly by the 5th day of the following month. Chocolate Bash currently requires franchisees to pay royalty fees and other amounts due to them by preauthorized bank draft, but they can require an alternative payment method.
It is important to note that Chocolate Bash retains the right to change, waive, or eliminate fees for any one or more franchisees as they deem appropriate. While all fees are generally uniform for all franchisees, this clause provides Chocolate Bash with the flexibility to adjust fees on a case-by-case basis. This could be a potential risk for franchisees if they are not aware of the conditions under which such changes might occur.