How does Cool Binz determine the royalty amount each month?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
deemed fully earned upon payment and non-refundable under any circumstances.
C. ROYALTY.
You shall pay us a monthly royalty (the "Royalty") equal to nine percent (9%) of Gross Sales, as defined below in Section 2.D. Beginning in month thirteen (13) of operations, if the percentage Royalty is less than $1,000, then you will be required to pay the minimum monthly royalty of $1,000 instead. You shall pay us a Royalty equal to nine percent (9%) of your Gross Sales until your Gross Sales exceed $500,000 in a calendar year. Once you exceed $500,000 in Gross Sales in a calendar year, your Royalty will decrease to eight percent (8%) of Gross Sales for the remainder of the calendar year, plus the entire following calendar year. If you fail to achieve over $500,000 in Gross Sales in the following calendar year, your Royalty will revert to 9%. If for any reason you are not in compliance with the Franchise Agreement, we reserve the right to reset the Royalty to nine percent (9%) for the remainder of the calendar year, at which time you must re-qualify for the discounted Royalty the following year.
For purposes of paying the Royalty, we follow the calendar month. If you transfer this Agreement to a new owner, the Royalty for all completed jobs must be paid on (a) the day of closing, or (b) on the effective termination date of this Agreement. Every month, we will scan the COOL BINZ Software or other Required Software, as applicable, (defined below) and find all jobs which have had changes in the amounts paid by Customers since the previous month, and compute Royalties on the amount of the change.
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, the royalty is calculated monthly based on a percentage of Gross Sales. Initially, franchisees pay a monthly royalty of 9% of Gross Sales. However, beginning in the thirteenth month of operations, if the 9% royalty is less than $1,000, franchisees must pay a minimum monthly royalty of $1,000.
If a Cool Binz franchisee's Gross Sales exceed $500,000 in a calendar year, the royalty rate decreases to 8% of Gross Sales for the remainder of that year and the entire following year. If the franchisee fails to surpass $500,000 in Gross Sales in the subsequent year, the royalty reverts to 9%. Cool Binz retains the right to reset the royalty to 9% if a franchisee is not in compliance with the Franchise Agreement, requiring them to re-qualify for the discounted royalty in the following year.
To determine the royalty amount, Cool Binz will scan the COOL BINZ Software each month to identify any changes in customer payments since the previous month and compute royalties based on the amount of the change. Cool Binz will provide an itemization of the jobs on which royalties will be assessed, along with the total royalty amount. Payment is due on the tenth of each month via electronic funds transfer.