Are all fees uniformly imposed by Chop5 Salad Kitchen?
Chop5_Salad_Kitchen Franchise · 2024 FDDAnswer from 2024 FDD Document
ner not permitted by the Franchise Agreement. |
Notes:
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- Nature and Manner of Payment: All fees are imposed by and payable to us except: (a) you spend the Local Advertising Commitment directly with local suppliers; and (b) you pay the cooperative advertising fee directly to your advertising cooperative (we may instead require you to pay this fee to us, in which case we will remit the fee to the cooperative on your behalf). All fees are nonrefundable and uniformly imposed. You must sign an ACH Authorization Form (attached to the Franchise Agreement as ATTACHMENT "E") permitting us to electronically debit your designated bank account for all amounts owed to us and our affiliates (other than fees due within 15 days after signing the Franchise Agreement). You must deposit all Gross Sales into the bank account and ensure sufficient funds are available for withdrawal before each due date. You are responsible for all taxes imposed on you or us based on products, intangible property (including trademarks) or services we provide to you.
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- Definitions: As used in this Disclosure Document, the following capitalized terms have the meanings given to them below:
- "Brand Fund" means the brand and system development fund that we intend to administer to promote public recognition of our brand and improve our System. We have not established the Brand Fund as of the issuance date of this Disclosure Document.
- "Gross Sales" means all gross sums you bill or collect from all goods and services you sell, plus all other sums you collect from the operation of your Restaurant, including any advertising revenues, sponsorship fees and business interruption insurance proceeds. Gross Sales excludes: (a) sales or use taxes; (b) amounts refunded to customers; (c) revenues from the sale of furniture, fixtures and equipment in the ordinary course of business; (d) the value of approved coupons, vouchers or similar items at the time of redemption; and (e) tips paid to and retained by staff members as a gratuity. The Manual may include policies governing the manner in which proceeds from the sale of gift cards are treated for purposes of calculating Gross Sales.
Source: Item 6 — OTHER FEES (FDD pages 12–17)
What This Means (2024 FDD)
According to Chop5 Salad Kitchen's 2024 Franchise Disclosure Document, most fees are uniformly imposed. Specifically, all fees are imposed by and payable to Chop5 Salad Kitchen with two exceptions: the Local Advertising Commitment, which is spent directly with local suppliers, and the cooperative advertising fee, which is paid directly to the advertising cooperative. However, Chop5 Salad Kitchen may require franchisees to pay the cooperative advertising fee to them, which they will then remit to the cooperative on the franchisee's behalf.
The FDD states explicitly that all fees are nonrefundable and uniformly imposed. Franchisees are required to sign an ACH Authorization Form, allowing Chop5 Salad Kitchen to electronically debit their bank account for all amounts owed. Franchisees are responsible for all taxes imposed on them or Chop5 Salad Kitchen based on the products, intangible property (including trademarks), or services provided to them.
Cooperative advertising fees are uniformly imposed on all Chop5 Salad Kitchen restaurants in the cooperative, including company-owned restaurants. The cooperative sets the minimum fee, which can be increased by a majority vote of all cooperative members, but it cannot exceed the maximum amount specified in the table. Each member gets one vote per restaurant they own within the cooperative. Chop5 Salad Kitchen and its affiliates also have membership and voting rights for company-owned restaurants within the cooperative. However, if company-owned restaurants make up the majority in the cooperative, Chop5 Salad Kitchen cannot increase the cooperative advertising fee unless a majority of franchisee members vote in favor of the increase. All cooperative advertising fees paid by the franchisee are credited towards their Local Advertising Commitment.