Under what conditions does a Crisp & Green franchisee pay a Minimum Royalty Fee?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
of business on the first business day of each calendar month with respect to the Gross Sales accrued during the most recently ended calendar month before the payment date.
If the Franchised Restaurant is not open and operating in compliance with our standards within nine (9) months after the Effective Date and we have not granted you an extension, you will be required to pay us Seven Thousand Five Hundred Dollars ($7,500) plus seven percent (7%) of your Gross Sales per month (the "Minimum Royalty Fee") as and for royalty fees for each month until your Restaurant opens in compliance with our standards (pro-rated for partial months). Additionally, if the Franchised Restaurant does not open for
Source: Item 23 — RECEIPTS (FDD pages 66–252)
What This Means (2024 FDD)
According to Crisp & Green's 2024 Franchise Disclosure Document, a franchisee may be subject to a Minimum Royalty Fee under specific circumstances related to the opening of their restaurant. If a Crisp & Green Franchised Restaurant does not open and operate in compliance with the franchisor's standards within nine months after the Effective Date of the Franchise Agreement, and if the franchisee has not been granted an extension, the franchisee will be required to pay a Minimum Royalty Fee.
The Minimum Royalty Fee is $7,500 plus seven percent (7%) of the Gross Sales per month. This fee is applied as and for royalty fees for each month until the Crisp & Green restaurant opens in compliance with the franchisor's standards. The fee is pro-rated for partial months, meaning that if the restaurant opens partway through a month, the fee will be adjusted accordingly.
Furthermore, the FDD states that if the Crisp & Green Franchised Restaurant does not open for operation in compliance with standards within the specified nine-month timeframe (again, absent an approved extension), Crisp & Green has the right to terminate the Franchise Agreement. This highlights the importance of adhering to the timeline and standards set forth by the franchisor to avoid financial penalties and potential termination of the franchise agreement.