What form of payment is required for the Royalty fee for a Floyds 99 franchise?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty1 | 6% of Gross Sales | Payable on the day of the week we periodically designate, based on prior week's Gross Sales | Gross Sales include all revenue from the Barbershop, including sales made away from the Barbershop premises. Gross Sales do not include sales taxes and discounts that have been approved by us in advance. Royalties are paid by electronic transfer of funds. |
| National Marketing Contribution1 | Currently 1.5% of Gross Sales, but we can require (upon 90 days' notice to you) up to a maximum of 3.0% of Gross Sales. The combination of the National Marketing Contribution and Local Advertising Allocation will not exceed a total of 4% of Gross Sales. (See Royalty Remarks above for discussion of "Gross Sales") | Payable on the day of the week we periodically designate, based on prior week's Gross Sales | We currently collect a National Marketing Contribution equal to 1.5% of Gross Sales and reserve the right to increase this amount up to 3.0% of Gross Sales on 90 days' prior written notice to you. Contributions are used primarily for production of advertising and marketing for the Barbershops. See Item 11. Our affiliate-owned Barbershops contribute the same as franchisee-owned Barbershops. The National Marketing Contribution is paid by electronic transfer of funds separate from the royalty transfer. Certain franchisees that signed Franchise Agreements prior to the date of this Disclosure Document have a National Marketing Contribution requirement of 1% of Gross Sales. |
Source: Item 6 — OTHER FEES (FDD pages 14–20)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, the royalty fee, which is 6% of gross sales, must be paid via electronic transfer of funds. This payment is due on a day of the week that Floyds 99 periodically designates, and it is based on the prior week's gross sales. Gross sales include all revenue from the barbershop, including sales made away from the barbershop premises, but do not include sales taxes and discounts that have been approved by Floyds 99 in advance.
Electronic funds transfer is a common method for royalty payments in franchising, as it provides a secure and efficient way for franchisors to collect fees. This ensures timely payments and reduces the administrative burden for both the franchisee and franchisor. The fact that the royalty is based on the prior week's gross sales and is payable on a designated day of the week provides a predictable schedule for franchisees to manage their finances.
It is important for prospective Floyds 99 franchisees to understand exactly how gross sales are calculated, especially regarding which discounts are approved and how off-premises sales are tracked. Franchisees should also confirm the specific day of the week that royalty payments are due to ensure they can comply with the payment schedule. Failure to pay royalties on time can result in late fees and other penalties, as outlined elsewhere in the Franchise Disclosure Document.
In addition to the royalty fee, Floyds 99 also collects a National Marketing Contribution, which is also paid via electronic transfer of funds. This contribution is currently 1.5% of gross sales but can be increased up to 3.0% with 90 days' notice. Understanding the payment methods and schedules for both the royalty fee and the marketing contribution is crucial for managing the financial obligations of a Floyds 99 franchise.