Can Chop5 Salad Kitchen change the reporting period for royalty fees?
Chop5_Salad_Kitchen Franchise · 2024 FDDAnswer from 2024 FDD Document
The initial franchise fee is fully earned by us and nonrefundable once this Agreement is signed.
- **13.2.
Royalty Fee.** On the day of each week we specify (the "royalty fee due date"), you must pay us a royalty fee equal to 6% of Gross Sales generated during the immediately preceding reporting period.
The current reporting period runs from the opening of business on Monday through the close of business on Sunday and the current royalty payment due date is the Wednesday immediately following the end of the prior reporting period.
We may periodically change the reporting period and weekly royalty payment due date through updates to the Manual.
Source: Item 23 — RECEIPT (FDD pages 50–178)
What This Means (2024 FDD)
According to Chop5 Salad Kitchen's 2024 Franchise Disclosure Document, the franchisor has the right to modify the reporting period and royalty payment due date. Currently, the reporting period for gross sales runs from Monday to Sunday, with the royalty payment due the following Wednesday.
This means that Chop5 Salad Kitchen franchisees must be prepared for potential changes to when they calculate and submit their royalty fees. These changes will be communicated through updates to the franchise's manual.
For a prospective franchisee, this clause indicates that the payment schedule is not fixed and could be altered during the term of the franchise agreement. It is important to stay updated with any manual revisions from Chop5 Salad Kitchen to ensure timely royalty payments and avoid any penalties.