What is the dependency between Gross Revenue Reports and Royalty payments for a Crawlspace Medic franchise?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
ross Revenue Report by an electronic transfer of data via the POS System at the times and interims then specified by Franchisor.
- 6.1.4 Method of Payment. Franchisee shall pay the Royalty and Brand Fund payment, as defined and more particularly described in Article 13, directly to the Franchisor via ACH on the same day they submit Gross Revenue Reports for the week. At Franchisor's request, Franchisee must execute documents that allow Franchisor to automatically take the Royalty Fee and Brand Fund Contribution due as well as other sums due Franchisor, from business bank accounts via electronic funds transfers. Franchisee's failure to allow electronic funds transfers on an ongoing basis is a material breach of this Agreement.
- 6.2. Late Fee. If the Royalty Fee, Brand Fund Contribution, or any Gross Revenue Reports are not received by Franchisor as required by this Agreement, Franchisee shall pay to Franchisor, in addition to the overdue amount, a late fee of One Hundred Dollars ($100.00). This late fee is reasonably related to Franchisor's costs resulting from the delay in payment and/or receipt of any report, is not a penalty, and is in addition to any other remedy available to Franchisor under this Agreement for Franchisee's failure to pay the Royalty Fee, the Brand Fund Contribution, and/or submit Gross Revenue Reports in accordance with the terms of this Agreement.
- 6.3. Interest. Any and all amounts that shall become due and owing from Franchisee to Franchisor under
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2024 FDD)
According to Crawlspace Medic's 2024 Franchise Disclosure Document, there is a direct dependency between Gross Revenue Reports and Royalty and Brand Fund payments. Specifically, a Crawlspace Medic franchisee must submit Gross Revenue Reports to the Franchisor, and on the same day, they must pay their Royalty and Brand Fund payments via ACH. The Gross Revenue Report must be in a form and contain information as prescribed by Crawlspace Medic.
Crawlspace Medic requires franchisees to use a point of sale system (POS System), currently Vonigo, for operation of the Franchised Business. The franchisee may be required to submit the Gross Revenue Report by an electronic transfer of data via the POS System. Furthermore, Crawlspace Medic can request that franchisees execute documents allowing them to automatically deduct Royalty Fees, Brand Fund Contributions, and other sums due via electronic funds transfers from the franchisee's business bank accounts. Failure to allow these electronic fund transfers is considered a material breach of the Franchise Agreement.
If a Crawlspace Medic franchisee fails to submit Gross Revenue Reports or make Royalty Fee and Brand Fund Contribution payments on time, they will incur a late fee of $100. Additionally, any amounts due to Crawlspace Medic will bear interest from the date due until paid at a rate of 18% per annum, or the highest rate permitted by law, whichever is lower. This highlights the importance of timely and accurate reporting and payments to avoid penalties and maintain good standing with the franchisor.