What is the minimum monthly Royalty fee for an Extreme Art Studio Business?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
eferred opportunity to enter into this Franchise Agreement with others, and it also offsets some of our expenses for franchisee recruitment.
3.2 ROYALTY FEE.
- 3.2.1 You agree to pay us a recurring royalty fee ("Royalty") for each calendar month (or other accounting period that we may designate from time to time). The amount of the Royalty will be equal to the greater of: (i) eight percent (8%) of your Gross Sales from all of your Extreme Art Studio Businesses for the previous calendar month (or other accounting period we designate); or (ii) $500 per month for each Extreme Art Studio Business you operate under this Franchise Agreement ("Minimum Royalty"). The Minimum Royalty shall begin being charged by us 6 months after you open your first Extreme Art Studio Business under this Franchise Agreement and immediately upon opening each subsequent Extreme Art Studio Business under a Standard Franchise (if applicable).
- 3.2.2 For purposes of this Franchise Agreement, "Gross Sales" means all revenue that you receive from operating
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to Extreme Art Studio's 2024 Franchise Disclosure Document, franchisees must pay a recurring royalty fee for each calendar month. The royalty is the greater of two options: 8% of the Gross Sales from all Extreme Art Studio Businesses for the previous month, or a minimum of $500 per month for each Extreme Art Studio Business operated under the Franchise Agreement.
The minimum royalty fee begins six months after the franchisee opens their first Extreme Art Studio Business. For each subsequent Extreme Art Studio Business opened under a Standard Franchise, the minimum royalty fee is charged immediately upon opening.
Gross Sales include all revenue received from operating the franchised business, including cash, checks, credit and debit card payments, barter exchanges, and proceeds from business interruption insurance. However, Gross Sales do not include sales, use, or service taxes collected from customers and paid to the appropriate taxing authority, bona fide customer refunds, or customer tips. The royalty payments are made via electronic funds transfer or other approved means and are nonrefundable.