How does the Fly Fitness franchisee pay the Brand Fund Contribution?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
s Franchised Business. Franchisor reserves the right to collect some or all of Franchisee's grand opening funds and implement grand opening campaign activities on Franchisee's behalf.
13.3. Brand Fund.
- 13.3.1. Franchisor has established a national fund on behalf of the System for national advertising, marketing, and brand development (the "Brand Fund"). Franchisee is required to contribute to the Brand Fund two percent (2%) of the weekly Gross Revenue generated by the Franchised Business ("Brand Fund Contribution"). Payments will be made in the same manner and time as the Royalty Fees. If Franchisee fails to timely report Gross Revenue, then, in addition to a late fee and interest pursuant to Sections 6.2 and 6.3 hereof, Franchisor shall collect one hundred twenty percent (120%) of the last Brand Fund Contribution payable. Franchisor shall reconcile amounts when Gross Revenue are reported.
- 13.3.2. Franchisor shall direct the Brand Fund and shall have sole discretion to approve or disapprove the creative concepts, materials and media used in such programs and the placement and allocation thereof.
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, franchisees are required to contribute to the Brand Fund, which is used for national advertising, marketing, and brand development. This contribution is 2% of the weekly Gross Revenue generated by the Franchised Business. The Brand Fund Contribution payments are made in the same manner and time as the Royalty Fees.
If a Fly Fitness franchisee fails to report Gross Revenue on time, they will be charged a late fee and interest, as well as an additional amount. Specifically, Fly Fitness will collect 120% of the last Brand Fund Contribution payable until the Gross Revenues are reported and amounts are reconciled. This incentivizes franchisees to report their Gross Revenues accurately and on time.
If the Royalty Fee, Brand Fund Contribution, or any Gross Revenue Reports are not received as required, Fly Fitness franchisees will also have to pay a late fee of $75.00, in addition to the overdue amount. Furthermore, any amounts due from the franchisee to Fly Fitness will bear interest from the due date until paid, at a rate of 18% per annum, or the highest rate permitted by law, whichever is lower. These measures ensure that Fly Fitness franchisees adhere to the payment terms outlined in the franchise agreement.