How must Royalty payments be made to Extreme Art Studio?

According to the 2024 Extreme Art Studio Franchise Disclosure Document, royalty payments must be made via electronic funds transfer (EFT) or by other means approved by Extreme Art Studio. The Royalty fee is a recurring fee, and the amount will be the greater of eight percent of gross sales from all Extreme Art Studio businesses for the previous calendar month, or $500 per month for each Extreme Art Studio Business operated under the Franchise Agreement. The minimum royalty begins six months after opening the first Extreme Art Studio Business, and immediately upon opening each subsequent Extreme Art Studio Business under a Standard Franchise.

Gross sales include all revenue received from operating the franchised business, including all amounts received 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. Gross Sales are deemed received at the time the products or services from which they were derived are delivered or rendered, or at the time the relevant sale takes place, whichever occurs first, regardless of whether final payment has been received.

In addition to the royalty fee, franchisees must also pay marketing fees in the same manner as the royalty. Any payment not made by the due date will be deemed overdue, and will incur interest on such amounts from the date such amounts were due until paid at the lesser of the daily equivalent of eighteen percent per year simple interest or the highest amount allowed under law. If any check or EFT payment does not successfully convey funds due to insufficient funds, stop payment instructions or any similar event, the franchisee will also pay a non-sufficient funds fee of $100 per incident.