When are weekly royalty payments due from a Closet Storage Concepts franchisee?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
All weekly payments required under this section shall be due and deducted from Franchisee's bank account on Monday of each week on the receipts for the preceding week or such other day as Franchisor mandates.
The royalty calculations shall be based on the weekly reports and/or statements signed by Franchisee in the form specified by Franchisor indicating all Gross Revenue (as defined in Section 3.3.2) of Franchisee during the applicable week, which must be submitted to Franchisor on or before the close of business on Monday of each week.
Such reports shall include all sales generated by Franchisee (including any sales from the Approved Location or otherwise) during the previous week, shall be complete, shall be filed timely and shall be signed by Franchisee or its designated manager.
If Franchisee fails to submit any weekly revenue report on a timely basis, Franchisor may estimate Gross Revenues and withdraw from Franchisee's operating account the amounts estimated to be due which will be reconciled when the required reports are received.
- 3.3.4 Insufficient Funds.
If the funds in Franchisee's bank account are insufficient to cover any amounts due under this Agreement on the date such funds are due, in addition to the overdue amount, Franchisor shall immediately be entitled to debit from Franchisee's bank account interest and charge its then-current fee to cover bank charges and administrative costs.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2025 FDD)
According to Closet Storage Concepts' 2025 Franchise Disclosure Document, weekly royalty payments are due and will be deducted from the franchisee's bank account on Monday of each week. These payments cover the receipts from the preceding week. However, Closet Storage Concepts retains the right to mandate a different day for these deductions.
The franchisee is required to participate in Closet Storage Concepts' electronic funds transfer program, which automatically deducts the weekly royalty and other owed payments. Before opening their Closet Storage Concepts business, franchisees must sign and provide all necessary documents to facilitate this program with the franchisor's bank. Franchisees are also obligated to inform Closet Storage Concepts immediately of any changes to their banking relationship, including account number changes.
In addition to the monetary payment, Closet Storage Concepts requires franchisees to submit weekly reports and/or statements, signed and in a specified format, detailing all gross revenue from the previous week. These reports are due on or before the close of business each Monday. Failure to submit these reports on time allows Closet Storage Concepts to estimate gross revenues and withdraw the estimated amount due from the franchisee's account, with reconciliation to occur upon receipt of the required reports. If the franchisee's account has insufficient funds to cover the royalty payment, Closet Storage Concepts can debit the account for the overdue amount, plus interest and any applicable bank charges and administrative costs.