What is the royalty fee for a Devon Creek franchise with gross revenues between $1,000,000 and $1,500,000?
Devon_Creek Franchise · 2024 FDDAnswer from 2024 FDD Document
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| Gross Revenue per year | Royalty Fee |
|---|---|
| $0 - $1,000,000 | 6% of the Gross Revenue generated weekly by your Franchise |
| $1,000,000 - $1,500,000 | 5% of the Gross Revenue generated weekly by your Franchise |
| $1,500,000 + | 4% of the Gross Revenue generated week |
Source: Item 6 — OTHER FEES (FDD pages 8–16)
What This Means (2024 FDD)
According to Devon Creek's 2024 Franchise Disclosure Document, the royalty fee is dependent on the gross revenue generated by the franchise. For a Devon Creek franchise with gross revenues between $1,000,000 and $1,500,000, the royalty fee is 5% of the gross revenue generated weekly.
It's important to note that this royalty fee is calculated on a weekly basis. This means that even if the annual gross revenue falls within the specified range, the franchisee must consistently pay 5% of their weekly gross revenue.
Understanding how gross revenue is defined is also crucial. According to the FDD, gross revenue includes all sales of every kind and nature at or from the Devon Creek franchise location. However, it does not include receipts from sales tax, properly documented refunds to customers, or properly documented promotional discounts. This definition ensures that the royalty fee is calculated on the actual revenue earned by the franchise, excluding pass-through taxes and legitimate deductions.