How must the Royalty fee be paid for an Extreme Art Studio franchise?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
Notes:
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- Fees. All fees paid to us or our affiliates are uniform and not refundable under any circumstances once paid. Fees paid to vendors or other suppliers may be refundable depending on the vendors and suppliers. We currently require you to pay fees and other amounts due to us or our affiliates via EFT or other similar means. You are required to complete the EFT authorization (in the form attached to this Franchise Disclosure Document in Exhibit H). We can require an alternative payment method or payment frequency for any fees or amounts owed to us or our affiliates under the Franchise Agreement. All fees are current as of the Issuance Date of this Franchise Disclosure Document. Certain fees that we have indicated may increase over the term of the Franchise Agreement. All fees are current as of the Issuance Date of this Franchise Disclosure Document. Certain fees that we have indicated may increase over the term of the Franchise Agreement.
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- Royalty. "Gross Sales" means all revenue that you receive from operating your Extreme Art Studio Business and any optional Module(s), including 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, or other credit transactions, and including all proceeds from any business interruption insurance. For example, Gross Sales includes the following: (1) all monies you receive from customers, including monies received for the sale of products and services; (2) the amount of gift card redemptions; (3) the proceeds of any business loss or interruption insurance or similar insurance; and (4) any other revenue you derive.
Source: Item 6 — OTHER FEES (FDD pages 13–18)
What This Means (2024 FDD)
According to Extreme Art Studio's 2024 Franchise Disclosure Document, franchisees are currently required to pay all fees, including the royalty fee, to Extreme Art Studio or its affiliates via EFT (Electronic Funds Transfer) or other similar means. Franchisees must complete an EFT authorization form. However, Extreme Art Studio retains the right to require an alternative payment method or payment frequency for any fees owed under the Franchise Agreement.
Extreme Art Studio may receive information regarding a franchisee's Gross Sales through the Computer System. If Extreme Art Studio ceases to have access to this information, and a franchisee fails to report their Gross Sales when due, Extreme Art Studio may debit the franchisee's designated account for an estimated Royalty and Brand Fund Contribution. This debit will be 110% of the average of the last three Royalty payments and Brand Fund Contributions that were debited.
If the estimated debited amounts are less than what is actually owed, Extreme Art Studio will debit the account for the balance. Conversely, if the debited amounts are greater than what is owed, the excess will be credited against the amounts due on the next payment date. This ensures that Extreme Art Studio can collect royalties even if direct sales data is unavailable, while also providing a mechanism for correcting any over- or under-payments based on estimated amounts.