What does the Face Foundrie Franchise Agreement say about the Royalty Fee for a Face Foundrie franchise?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
"). Franchisee acknowledges and agrees that the Initial Franchise Fee is paid as consideration for Franchisor granting Franchisee the right to develop, open and operate the Facial Bar using the Marks and the System, that the Initial Franchise Fee is fully earned by Franchisor at the time this Agreement is executed, and that the Initial Franchise Fee shall not be refundable for any reason.
6.02 Royalty Fee and Minimum Royalty Fee.
- (a) In addition to all other amounts required to be paid hereunder, during the term hereof, Franchisee agrees to pay Franchisor a continuing royalty fee (the "Royalty Fee") equal to the greater of: (i) seven percent (7%) of Gross Sales per month and (ii) the applicable Minimum Royalty Fee. Payment of the Royalty Fee shall be made no later than the 5th day of each month for Gross Sales from the prior month during the term of this Agreement.
- (b) The "Minimum Royalty Fee" applicable to the Facial Bar is an amount of One Thousand Five Hundred Dollars ($1,500) per month. The Minimum Royalty Fee will be assessed beginning on the first day of the month following the earlier of: (a) the date the Facial Bar opens, and (b) the date that is ten (10) months after the date of this Agreement, subject to any extensions to the required opening date that have been granted to Franchisee pursuant to Section 3.03. Franchisor will reconcile the Minimum Royalty Fee with the Royalty Fee Franchisee has actually paid on the 5th day of the mont
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, franchisees must pay a continuing royalty fee. This Royalty Fee is the greater of two amounts: 7% of the monthly Gross Sales, or the applicable Minimum Royalty Fee. The Royalty Fee must be paid by the 5th day of each month, covering the Gross Sales from the previous month.
The Minimum Royalty Fee for a Face Foundrie Facial Bar is $1,500 per month. This fee starts either on the first day of the month following the Facial Bar's opening, or ten months after the Franchise Agreement date, whichever comes first. This start date is subject to any extensions granted to the franchisee for the required opening date.
Face Foundrie will reconcile the Minimum Royalty Fee with the actual Royalty Fee paid by the franchisee. This reconciliation occurs on the 5th day of the month following the end of the quarter in which the fee applies, or on another schedule determined by Face Foundrie. If there's a difference, Face Foundrie will debit the franchisee's account for any additional Royalty Fees owed. It is important to note that even if a franchisee pays the Minimum Royalty Fees, Face Foundrie still retains the right to terminate the Franchise Agreement under certain conditions.
Gross Sales for royalty calculation include revenues from products, merchandise, and services sold at the Facial Bar, whether paid in cash, credit, or other forms. Deductions from Gross Sales are allowed for refunds, allowances, discounts (including coupon sales), and excise or sales taxes remitted to governmental authorities, provided these sales were previously included in Gross Sales.