Where in the Creative World School FDD can I find information about the royalty fee?
Creative_World_School Franchise · 2025 FDDAnswer from 2025 FDD Document
- 6.02 Royalty.
Within 3 days of monthly billing during the Term, you agree to pay us a recurring periodic royalty ("Royalty") calculated based on a certain percentage of your School's weekly Adjusted Gross Revenues determined as follows:
(a) 5% of your School's weekly Adjusted Gross Revenues during the period beginning on the Royalty Commencement Date and ending on the last day of the 12th month following the Royalty Commencement Date;
(b) 6% of your School's weekly Adjusted Gross Revenues during the period beginning on the first day of the 13th month following the Royalty Commencement Date and ending on the last day of the 24th month following the Royalty Commencement Date; and
(c) 7% of your School's weekly Adjusted Gross Revenues each week, thereafter.
We must receive the Royalty on or before the first Friday of each month for the immediately preceding calendar month ending Sunday.
The "Royalty Commencement Date" means the earlier of: (a) the date of your enrollment of 75 children in the School; or (b) the first day of the 7th month immediately and consecutively following the Opening Date.
You must send to us written notice of your enrollment of the 75th child in the School immediately upon such enrollment.
Source: Item 23 — RECEIPTS (FDD pages 80–247)
What This Means (2025 FDD)
According to the 2025 Creative World School FDD, details regarding the royalty fee can be found in Item 23. Specifically, section 6.02 outlines the royalty structure. Franchisees are required to pay a recurring royalty based on a percentage of their school's weekly Adjusted Gross Revenues.
The royalty percentage varies over time. For the first 12 months after the Royalty Commencement Date, the royalty is 5% of weekly Adjusted Gross Revenues. From months 13 through 24, it increases to 6%. After the first 24 months, the royalty becomes 7% of weekly Adjusted Gross Revenues. The Royalty Commencement Date is defined as the earlier of when the franchisee enrolls 75 children or the first day of the 7th month after the school's opening.
Creative World School requires royalty payments to be received within 3 days of monthly billing, specifically on or before the first Friday of each month for the preceding calendar month ending on Sunday. Franchisees must also notify Creative World School in writing immediately upon enrolling their 75th child. This royalty structure is typical in the franchise industry, where franchisors collect a percentage of gross revenue to support ongoing services and brand development.