When does the minimum royalty fee assessment begin for a Face Foundrie franchise?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
e 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 t
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, the minimum royalty fee assessment begins on the first day of the month following whichever occurs sooner: the date the Facial Bar opens, or ten months after the franchise agreement date. This is subject to any extensions to the required opening date granted to the franchisee. The minimum royalty fee is $1,500 per month.
For a prospective Face Foundrie franchisee, this means that even if the facial bar is not yet open, they will be required to pay the minimum royalty fee starting ten months after signing the franchise agreement. This could impact the franchisee's initial investment and cash flow projections, as they will need to account for this expense even before generating revenue.
Face Foundrie reconciles the minimum royalty fee with the actual royalty fee (7% of gross sales) on the 5th day of the month following the end of the applicable quarter. If the actual royalty fee exceeds the minimum, the franchisee pays the higher amount. Face Foundrie will debit the franchisee's account for any additional royalty fees due.
It is important to note that the franchisee's payment of any minimum royalty fees does not affect Face Foundrie's right to terminate the Franchise Agreement. This highlights the importance of opening the Facial Bar as soon as possible and generating sufficient revenue to exceed the minimum royalty fee threshold.