What happens if a Cilantro Taco Grill franchisee does not report revenues for any week?
Cilantro_Taco_Grill Franchise · 2024 FDDAnswer from 2024 FDD Document
If you do not report revenues for any week, then we will collect 120% of the last Royalty Fee collected and settle the balance the next period in which you report revenue. You are required to set up authorization at your bank to allow us to electronically transfer funds from your bank account to our bank account. Interest and late fees will apply to any late payments or electronic funds transfer requests denied due to insufficient funds.
Source: Item 6 — OTHER FEES (FDD pages 12–18)
What This Means (2024 FDD)
According to Cilantro Taco Grill's 2024 Franchise Disclosure Document, if a franchisee fails to report revenues for any week, Cilantro Taco Grill will take specific actions to ensure royalty payments are maintained. The franchise agreement requires franchisees to authorize electronic fund transfers from their bank account to Cilantro Taco Grill's account.
In the event that a franchisee does not report revenues for a given week, Cilantro Taco Grill will collect 120% of the last Royalty Fee that was collected. This amount will be used as a temporary royalty payment.
To reconcile the difference, Cilantro Taco Grill will settle the balance in the subsequent period when the franchisee resumes reporting revenue. This means that once the franchisee reports their actual revenue, the overpayment or underpayment will be adjusted accordingly. Additionally, franchisees should be aware that interest and late fees will be applied to any late payments or if electronic fund transfer requests are denied due to insufficient funds.