How often is the 6% of gross sales fee due for an Endless Summer Sweets franchise?
Endless_Summer_Sweets Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| 6% of your gross | Weekly | See Notes 1 and Note 2. | |
| sales |
Notes
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- "Gross Sales" is defined in our franchise agreement as the total dollar amount of all sales generated through your business for a given period, including, but not limited to, payment for any services or products sold by you, whether for cash or credit. Gross Sales does not include (i) bona fide refunds to customers, (ii) sales taxes collected, (iii) sale of used equipment not in the ordinary course of business, or (iv) sales of prepaid cards or similar products (but the redemption of any such card or product will be included in Gross Sales).
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- We currently require you to pay royalty fees and other amounts due to us by preauthorized bank draft on a weekly basis. However, we can require an alternative payment method.
Type of Fee Amount Due Date Remarks $100 plus interest on On demand We may charge a late fee if you fail to the unpaid amount at make a required payment when due. a rate equal to 18% per year (or, if such payment exceeds the maximum allowed by law, then interest at the highest rate
- We currently require you to pay royalty fees and other amounts due to us by preauthorized bank draft on a weekly basis. However, we can require an alternative payment method.
Source: Item 6 — Other Fees (FDD pages 7–10)
What This Means (2024 FDD)
According to Endless Summer Sweets's 2024 Franchise Disclosure Document, a franchisee is required to pay 6% of their gross sales as a royalty fee on a weekly basis. The FDD specifies that these payments are to be made via preauthorized bank draft, although Endless Summer Sweets retains the right to require an alternative payment method. Gross sales are defined as the total dollar amount of all sales generated through the business, including payments for services or products sold, whether for cash or credit.
However, gross sales do not include bona fide refunds to customers, sales taxes collected, the sale of used equipment not in the ordinary course of business, or sales of prepaid cards or similar products. It is important to note that while the sale of prepaid cards is excluded from gross sales, the redemption of any such card or product will be included in gross sales.
Understanding the nuances of what constitutes gross sales is crucial for Endless Summer Sweets franchisees to accurately calculate and remit their weekly royalty payments. Failure to comply with the specified payment schedule may result in late fees of $100 plus interest on the unpaid amount at a rate of 18% per year, or the maximum allowed by law, as well as other potential penalties for non-compliance.