To whom is the Continuing Royalty Fee payable for a Fly Fitness franchise?

According to Fly Fitness's 2024 Franchise Disclosure Document, the Continuing Royalty Fee is payable to the franchisor. The table in Item 6 of the FDD specifies that the Continuing Royalty Fee, which is 7% of weekly Gross Revenue, is due weekly on Wednesday for the Gross Revenue of the prior week (Monday through Sunday). The 'Remarks' column of the table explicitly states that this fee is 'Payable to us,' meaning Fly Fitness itself.

This means that as a Fly Fitness franchisee, you are obligated to remit 7% of your weekly gross revenue to Fly Fitness every Wednesday. This payment schedule is fairly typical in the franchise industry, as it allows the franchisor to receive ongoing revenue and support its services to franchisees. Gross Revenue includes all income from the operation of the Franchised Business, with specific exclusions for sales tax, documented refunds, and certain discounts.

It is important to note that the FDD also mentions that franchisees are required to set up authorization at their bank to allow Fly Fitness to electronically transfer funds from the franchisee's bank account to Fly Fitness's bank account. This electronic transfer requirement ensures timely payment of the Continuing Royalty Fee and reduces the administrative burden for both the franchisee and Fly Fitness. Interest and late fees will apply to any late payments or electronic funds transfer requests denied due to insufficient funds, so franchisees must ensure sufficient funds are available.