Where can I find the specific amount of the Royalty Fee for a Devon Creek franchise?
Devon_Creek Franchise · 2024 FDDAnswer from 2024 FDD Document
- 6.1 Initial Franchise and Royalty Fees. As part of the consideration for the right to operate the Franchise granted herein, Franchisee shall pay to Franchisor the following fees:
- 6.1.1 Initial Franchise Fee. Franchisee acknowledges and agrees that the grant of this Franchise and the rights and obligations of the parties under this Agreement constitute the sole and only consideration for the initial franchise fee as set forth in Attachment 1 to the Franchise Agreement(the "Initial Fee"). The Initial Fee is fully earned at the time this Franchise Agreement is signed and is not refundable
under any circumstances. Franchisee shall pay the full amount of the Initial Fee to Franchisor upon Franchisee's execution of this Agreement.
6.1.2 Royalty Fee.
Franchisee agrees to pay Franchisor, monthly throughout the Term, a royalty fee as set forth in Attachment 1 to the Franchise Agreement (the "Royalty Fee").
If Franchisee fails to achieve the minimum Gross Revenue as defined in Attachment 1 to the Franchise Agreement, Franchisor may collect from Franchisee a Royalty equal to what Franchisee would have paid had Franchisee achieved the minimum gross revenue ("Minimum Gross Revenue").
The term "Gross Revenue" includes all revenues and income from any source derived or received by Franchisee from, through, by or on account of the operation of the Franchised Business or made pursuant to the rights granted hereunder, including but not limited, any and all other revenues received using Franchisor's trademarks, methods, operations and/or trade secrets whether received in cash, in services, in kind, from barter and/or exchange, on credit (whether or not payment is actually received) or otherwise.
Gross Revenues also include all proceeds from any business interruption insurance.
Source: Item 22 — CONTRACTS (FDD page 45)
What This Means (2024 FDD)
According to Devon Creek's 2024 Franchise Disclosure Document, the specific amount of the royalty fee can be found in Attachment 1 to the Franchise Agreement. Franchisees are required to pay this royalty fee monthly throughout the term of the agreement.
If a franchisee fails to achieve the minimum gross revenue as defined in Attachment 1, Devon Creek has the right to collect a royalty equal to what the franchisee would have paid had they achieved the minimum gross revenue. Gross revenue includes all revenues and income derived from the operation of the franchised business, including revenues received using Devon Creek's trademarks, methods, and trade secrets, whether received in cash, services, or other forms.
Gross revenues also encompass proceeds from any business interruption insurance. This means that even if a Devon Creek franchise experiences a disruption that leads to an insurance payout, those funds are considered part of the gross revenue subject to royalty fees. Therefore, it is important for prospective franchisees to carefully review Attachment 1 to fully understand how the royalty fee is calculated and what constitutes gross revenue.