What is the minimum weekly Royalty fee for a Closet Storage Concepts franchise?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty | 5% of Gross | Payable on each | (See Note 1) |
| Revenues | Monday via ACH for | ||
| subject to a | the week ending the | ||
| minimum of | immediately prior | ||
| $125 per week | Saturday. |
Note 1: "Gross Revenues" are defined in the Franchise Agreement to include the total gross revenue derived from the operation of the Franchised Business whether from sales for cash or credit, including sales of both franchise products and services, and including installation charges, exclusive of all sales taxes, use taxes, gross receipts taxes and other similar taxes added to the sales price and collected from the customer, and less any bona fide refunds, rebates, and discounts.
Gross Revenues are aggregated for multiple locations you operate within one granted Territory. If you fail to submit any weekly revenue report on a timely basis, we may estimate Gross Revenues and withdraw from your operating account the amounts estimated to be due which will be reconciled when the required reports are received.
Source: Item 6 — OTHER FEES (FDD pages 13–18)
What This Means (2025 FDD)
According to Closet Storage Concepts's 2025 Franchise Disclosure Document, franchisees must pay a royalty fee equal to 5% of gross revenues, with a minimum payment of $125 per week. This royalty is due every Monday via Automated Clearing House (ACH) for the week ending the immediately prior Saturday. Gross revenues include all revenue from sales, services, and installation charges, excluding sales taxes.
This means that even if a Closet Storage Concepts franchise location has a slow week with gross revenues below $2,500 (since 5% of $2,500 is $125), the franchisee is still obligated to pay the minimum royalty fee of $125. This ensures that Closet Storage Concepts receives a baseline income from each franchise unit, regardless of its weekly performance.
It is important to note that the definition of "Gross Revenues" is detailed in the Franchise Agreement, including sales for cash or credit, sales of franchise products and services, and installation charges, excluding sales taxes. Gross Revenues are aggregated for multiple locations you operate within one granted Territory. Franchisees should carefully review this definition to fully understand what revenue is subject to the royalty fee.
Furthermore, if a Closet Storage Concepts franchisee fails to submit weekly revenue reports on time, Closet Storage Concepts has the right to estimate gross revenues and withdraw the estimated amount due from the franchisee's operating account. This amount will be reconciled once the required reports are received, highlighting the importance of timely and accurate reporting.