How is the 'ROYALTY FEE' defined in the Extreme Art Studio Franchise Agreement, and on what page is it discussed?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
sses and our loss of deferred 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 the Franchised Business (including any modules), including, but not limited to, all amounts or other consideration that you receive, directly or indirectly, at or away
from the Extreme Art Studio Business, and in the form of cash, check, credit and debit card, barter exchange, trade credit,
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio Franchise Disclosure Document, the Royalty Fee is defined in Section 3.2 on page 64. Extreme Art Studio franchisees must pay a recurring royalty fee for each calendar month (or other accounting period designated by Extreme Art Studio).
The royalty fee is the greater of two amounts: either eight percent (8%) of the franchisee's Gross Sales from all Extreme Art Studio Businesses for the previous month, or a minimum royalty of $500 per month for each Extreme Art Studio Business operated under the Franchise Agreement.
The Minimum Royalty starts being charged 6 months after the franchisee opens their first Extreme Art Studio Business, and immediately upon opening each subsequent Extreme Art Studio Business under a Standard Franchise. Gross Sales includes all revenue received from operating the Franchised Business, including all amounts received directly or indirectly, at or away from the Extreme Art Studio Business, in any form of payment, including proceeds from business interruption insurance.