Do Chocolate Fish Coffee affiliates pay royalties?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
re Document, may be one source of this information.
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- Our Affiliates do not pay royalties or marketing fees to us; however, we have shown the estimated expenditures (6% Royalty, 1% Brand Fund) for each Affiliate had they incurred those expenses.
- 5. Some outlets have sold and earned this amount. Your individual results may differ. There is no assurance that you'll sell or earn as much.
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- Written substantiation of the information contained in this Item 19 will be made available to prospective franchisees upon reasonable request.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 37–38)
What This Means (2024 FDD)
According to Chocolate Fish Coffee's 2024 Franchise Disclosure Document, Chocolate Fish Coffee affiliates are not required to pay royalties or marketing fees. However, Item 19 includes estimated royalty fees and brand fund contributions in its financial performance representation. These estimates are calculated based on a percentage of gross sales.
Specifically, the document provides examples of estimated royalty fees and brand fund contributions based on the gross sales of three company-owned locations between September 1, 2022, and September 30, 2023. For instance, one location with gross sales of $850,850.75 would have an estimated royalty fee of $51,051.05 and an estimated brand fund contribution of $8,508.51. Another location with gross sales of $531,854.48 would have estimated royalty fees of $31,911.27 and brand fund fees of $5,318.54. A third location with gross sales of $828,545.45 would have estimated royalty fees of $49,712.73 and brand fund fees of $8,285.45.
While affiliates do not actually pay these fees, Chocolate Fish Coffee provides these figures to illustrate what the expenses would be if they were incurred. The estimated royalty fee is calculated as 6% of gross sales, and the estimated brand fund contribution is 1% of gross sales. This information is based on the historic financial performance of three company-owned locations and is not a projection of future performance for affiliates. Prospective franchisees should conduct their own independent investigation of costs and expenses.