How often does a Devon Creek franchisee pay the Royalty Fee?
Devon_Creek Franchise · 2024 FDDAnswer from 2024 FDD Document
- 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, franchisees are required to pay a Royalty Fee on a monthly basis throughout the term of the Franchise Agreement.
This means that each month, a Devon Creek franchisee must remit a portion of their Gross Revenue to the franchisor. The specific amount or percentage that constitutes the Royalty Fee is detailed in Attachment 1 of the Franchise Agreement, which is not included in this excerpt.
Furthermore, if a franchisee fails to achieve a minimum Gross Revenue, Devon Creek has the right to collect a royalty based on what the franchisee would have paid had they reached that minimum threshold. Gross Revenue includes all income derived from the operation of the franchised business, regardless of the form in which it is received.