When is the Brand Fund Contribution due for an Extreme Art Studio franchise?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
OTHER FEES**
| Type of Fee(1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty(2) | The greater of 8% of Gross Sales ("Royalty") or $500 per month ("Minimum Royalty") | Within five days after the end of the calendar month | The Royalty is based on "Gross Sales" during the previous month. Gross Sales are defined in Note 2. You must pay your Royalty via electronic funds transfer ("EFT"), or such other manner we may prescribe. The Minimum Royalty begins six months after you open your first Extreme Art Studio Business and immediately after you open additional Extreme Art Studio Businesses. |
| Brand Fund Contribution(2) | 1% of Gross Sales | Same as Royalty | This contribution will be used for a system-wide "Brand Fund" for our use in promoting and building the Extreme |
Source: Item 6 — OTHER FEES (FDD pages 13–18)
What This Means (2024 FDD)
According to Extreme Art Studio's 2024 Franchise Disclosure Document, the Brand Fund Contribution is due within five days after the end of the calendar month, the same as the royalty payment. The Brand Fund Contribution is 1% of Gross Sales and is used for system-wide promotion of the Extreme Art brand.
This means that as an Extreme Art Studio franchisee, you'll need to calculate your gross sales for each month and remit 1% of that amount to the Brand Fund within five days of the month's end. This contribution is in addition to the royalty fee, which is the greater of 8% of Gross Sales or $500 per month.
It's important to note that Extreme Art Studio requires royalty and brand fund contribution payments via electronic funds transfer (EFT) or another method they prescribe. Failure to report gross sales when due could result in Extreme Art Studio debiting your account for an estimated amount. Franchisees should carefully track their gross sales and ensure timely payments to avoid penalties or account debits.