When is the Chocolate Bash royalty fee due each month?

According to Chocolate Bash's 2024 Franchise Disclosure Document, the royalty fee, which is 6% of gross sales, is due monthly by the 5th day of the following month. This means that sales generated in January are subject to the 6% royalty fee, and that amount must be paid to Chocolate Bash by February 5th. The FDD also specifies that Chocolate Bash requires franchisees to pay royalty fees and other amounts due via preauthorized bank draft, although they can require an alternative payment method. Gross sales are defined as the total dollar amount of all sales generated through your business for a given period, including payment for any services or products sold, whether for cash or credit, but excluding 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. However, the redemption of any such card or product will be included in Gross Sales.

Franchisees should be aware of this payment schedule to ensure timely payments and avoid potential late fees or penalties. It is common practice in the franchise industry for royalty fees to be calculated as a percentage of gross sales and paid on a regular basis, typically monthly. The preauthorized bank draft requirement ensures that Chocolate Bash receives payments promptly and efficiently. Franchisees should carefully review the definition of "Gross Sales" in the franchise agreement to understand what is included in the calculation of royalty fees.

Missing the royalty payment deadline can result in a late fee of $100 plus interest on the unpaid amount at a rate equal to 18% per year (or the maximum allowed by law).