On what date is the Brand Development Fund Fee due for Dryer Vent Squad franchisees?
Dryer_Vent_Squad Franchise · 2024 FDDAnswer from 2024 FDD Document
- (1) If Franchisor institutes the Brand Development Fund, Franchisee shall pay, on the Due Date, a mandatory and continuing fee to the Brand Development Fund in an amount equal to a percentage of Gross Sales (as determined and designated by Franchisor in Franchisor's Reasonable Business Judgment) for each monthly Accounting Period (the "Brand Development Fund Fee"), provided, however, Franchisee will not be required to contribute more than 2% of the Gross Sales of the Franchised Business for each monthly Accounting Period;
- (2) Franchisor will provide Franchisee with written notice of the percentage of Gross Sales that Franchisee is required to contribute to the Brand Development Fund. Upon such written notice to Franchisee, the percentage of Gross Sales to be paid by Franchisee to the Brand Development Fund will be applicable for each and every monthly Accounting Period thereafter during the Term until otherwise designated by Franchisor in writing. The Brand Development Fund Fee shall be paid to Franchisor on the Due Date and in accordance with the payment terms and method set forth in Article 5.B. for the payment of Royalty Fees or as otherwise designated by Franchisor;
Source: Item 23 — RECEIPTS (FDD pages 51–207)
What This Means (2024 FDD)
According to the 2024 Dryer Vent Squad Franchise Disclosure Document, the Brand Development Fund Fee is due on the "Due Date", which is defined in Article 5.B of the franchise agreement. The Brand Development Fund Fee is a mandatory and continuing fee, calculated as a percentage of Gross Sales for each monthly accounting period. However, the franchisee will not be required to contribute more than 2% of Gross Sales for each monthly accounting period.
Dryer Vent Squad will provide written notice to the franchisee specifying the percentage of Gross Sales required for the Brand Development Fund Fee. This percentage will remain applicable for each monthly accounting period until Dryer Vent Squad designates otherwise in writing. The Brand Development Fund Fee must be paid in accordance with the payment terms and method outlined in Article 5.B for Royalty Fees, or as otherwise specified by Dryer Vent Squad.
Prospective franchisees should carefully review Article 5.B of the Dryer Vent Squad franchise agreement to fully understand the specific payment terms, methods, and the exact definition of the "Due Date" for the Brand Development Fund Fee. Understanding these details is crucial for managing cash flow and meeting financial obligations under the franchise agreement.