Under what conditions can Craters & Freighters collect the Royalty Fee more frequently?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor reserves the right to collect the Royalty Fee more frequently (e.g., weekly) upon thirty (30) days' prior written notice to Franchisee. Non-payment of any Royalty Fees will be deemed a default under this Agreement and will provide Franchisor a basis to terminate this Agreement. "Adjusted Gross Sales" means the total of all amounts received from customers for services performed and products sold from, at or in connection with Franchisee's Franchised Business, or arising out of the operation or conduct of business by Franchisee's Franchised Business, including sales made at or away from the Premises, whether such amounts are paid by cash, credit, checks, gift certificates, coupons, services, property or other means of exchange, but excluding all federal, state or municipal sales or services taxes collected from customers and paid to the appropriate taxing authority.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to Craters & Freighters' 2025 Franchise Disclosure Document, the company reserves the right to collect Royalty Fees more frequently than the standard monthly schedule. This adjustment can be made with thirty days' prior written notice to the franchisee.
This provision in the franchise agreement allows Craters & Freighters to implement a more frequent collection schedule, such as weekly, if deemed necessary. The FDD specifies that non-payment of any Royalty Fees constitutes a default under the agreement, which could lead to termination of the franchise agreement.
For a prospective franchisee, this means that while the standard royalty fee payment is monthly, Craters & Freighters retains the flexibility to change the payment schedule with adequate notice. It is crucial for franchisees to maintain timely royalty payments to avoid defaulting on the agreement and risking termination of their franchise.