How must a Creative World School franchisee pay Royalties and other amounts due?
Creative_World_School Franchise · 2025 FDDAnswer from 2025 FDD Document
2,000); and (b) a monthly fee (currently $200 per month) for the 5-year period commencing in July of the year your School becomes accredited (the "Accreditation Fee"). We may from time to time adjust, change or otherwise modify the amount and payment of the monthly Accreditation Fee upon 30 days written notice to you.
- 6.06 Electronic Funds Transfer/ACH. You must pay us all Royalties and other amounts due and owing to us by electronic funds transfer/ACH. We will designate the date each month (the "Payment Day") for the Royalty payment. You agree to comply with the procedures we specify in our Manuals and perform such acts and sign and deliver such documents as may be necessary to accomplish payment by this method. On the Payment Day, you will report to us by telephone or electronic means or on written form, as we direct, the School's true and correct Gross Revenues and Adjusted Gross Revenues for the immediately preceding week. You will give us authorization, in a form that we designate, to initiate debit entries or credit correction entries to the School's bank operating account (the "Account") for payments of Royalties and other amounts due under this Agreement, including any applicable interest charges. For new Schools, you must provide this authorization at least 30 days prior to opening your School. You will make the funds available in the Account for withdrawal by electronic transfer no later than the Payment Day. The amount actually transferred from the Account to pay Royalties will be based on the School's Adjusted Gross Revenues reported to us. If you have not reported the School's Adjusted Gross Revenues to us for any reporting period, we will transfer from the Account an amount calculated in accordance with our reasonable estimate of the School's Adjusted Gross Revenues during any such reporting period. If we determine at any time that you have underreported Gross Revenues or Adjusted Gross Revenues or underpaid Royalties or other amounts due to us, we will be authorized to immediately initiate a transfer from the Account in the appropriate amount in accordance with the foregoing procedures, including applicable interest and late charges. Any overpayment will be credited to the Account through a credit, effective as of the first reporting date after you and we determine that such credit is due.
- 6.07 Definition of "Gross Revenues".
Source: Item 23 — RECEIPTS (FDD pages 80–247)
What This Means (2025 FDD)
According to the 2025 Creative World School FDD, franchisees are required to authorize Creative World School to initiate debit entries for royalty payments and other amounts owed. Creative World School will designate a 'Payment Day' each month for royalty payments. Franchisees must report their School's Gross Revenues and Adjusted Gross Revenues for the preceding week via telephone, electronic means, or written form, as directed by Creative World School.
New Creative World School locations must provide this payment authorization at least 30 days before opening. Franchisees must ensure funds are available in their bank operating account for electronic transfer to Creative World School on the Payment Day. The royalty amount transferred will be based on the reported Adjusted Gross Revenues. If a franchisee fails to report Adjusted Gross Revenues, Creative World School will estimate the amount and transfer funds accordingly.
Creative World School is authorized to immediately transfer funds from the franchisee's account if they determine that the franchisee has underreported Gross Revenues or Adjusted Gross Revenues, or underpaid royalties or other amounts due, including interest and late charges. Overpayments will be credited back to the franchisee's account on the first reporting date after the overpayment is determined. All amounts owed to Creative World School will bear interest after the due date at an annual rate of 18% or the highest contract rate permitted by law, whichever is less. In addition to interest, late payments are subject to a fee of 5% of the amount due.
Creative World School has the right to apply any payments made by the franchisee to any past due indebtedness, regardless of any designation the franchisee might make. Creative World School also has the right to offset any amounts the franchisee or their owners owe against any amounts Creative World School might owe to the franchisee or their owners. These payment terms are designed to ensure timely and accurate payments to Creative World School, with mechanisms in place to address underreporting, late payments, and overpayments.