What is included in the Gross Revenues calculation for the Crepe De Licious Royalty Fee?
Crepe_De_Licious Franchise · 2025 FDDAnswer from 2025 FDD Document
excluded from this calculation) but not including: (a) any sales taxes or other taxes you collect for transmittal to the appropriate taxing authority; or (b) any bona fide refunds you make to customers (collectively, "Gross Revenues"). Gross Revenues are deemed received by you at the time the products or services or products from which they were derived are delivered or rendered, or at the time the relevant sale takes place, whichever occurs first, regardless of whether final payment (e.g., collection on an account receivable) actually has been received by you.
- 8.03 Advertising Fund Contribution. During the term of this Agreement, we require you to pay us a continuing Advertising Fund Contribution equal to three percent (3%) of your Gross Revenues ("Advertising Fund Contribution").
- 8.04 Place and Method of Payment. You will pay us, without billing or demand, all Royalty Fees and Advertising Fund Contributions required by this Agreement are payable by the fifth day of each month. All fees and other payments due to us under this Agreement will be made to us at our headquarters in Ontario, Canada or as we otherwise specify in writing. We have the right to require you to transmit fees and other payments to us by means of electronic fund transfers, sweep accounts, Internet payment methods, or other methods in accordance with procedures that we may establish in the Operations Manual or otherwise specify in writing. If we require special means of payment, you will establish any required accounts and sign all documents reasonably required, and will otherwise cooperate with us, to effectuate these means (See Exhibit G of the Franchise Disclosure Document). If any payment is made to us by credit card for any fee required, we may charge a service charge of up to four percent (4%) of the total charge.
- 8.05 Late Fee and NSF Fee. If we do not timely receive any fee or any other amount due to us under this Agreement on or before the applicable due date, you will pay us a late fee equal to $100, plus the lesser of the daily equivalent of fifteen percent (15%) per year simple interest or the highest amount allowed under law, on any overdue amount for each day any amount is past due, accruing until the past due amount is paid in full. This provisio
Source: Item 22 — CONTRACTS (FDD page 57)
What This Means (2025 FDD)
According to Crepe De Licious's 2025 Franchise Disclosure Document, Gross Revenues are calculated at the time of delivery or rendering of products or services, or when the relevant sale occurs, regardless of whether final payment has been received. This means that Crepe De Licious franchisees are responsible for royalty fees on sales as soon as the product is delivered or the service is provided, not when the customer actually pays.
This policy has significant implications for franchisees. They must track sales meticulously to accurately calculate and remit royalty fees, even if some sales are on credit or payment is delayed. This could strain cash flow, as franchisees need to pay royalties on revenues they haven't yet collected. It is important for prospective franchisees to understand this aspect of the agreement and factor it into their financial planning.
In addition to royalty fees, Crepe De Licious franchisees must also pay a continuing Advertising Fund Contribution equal to three percent (3%) of their Gross Revenues. This contribution is also based on the same Gross Revenues calculation, meaning it is due at the time of delivery or sale, regardless of actual payment receipt. Both the royalty fees and the advertising fund contributions are payable by the fifth day of each month.
Late payments of any fees due to Crepe De Licious under the agreement will incur a late fee of $100, plus interest calculated as the lesser of 15% per year or the highest amount allowed by law. Additionally, a $100 fee will be charged for any dishonored payments. These penalties highlight the importance of timely and accurate payments to Crepe De Licious to avoid additional costs.