What other payments are due with the Gross Revenue Report for a Fly Fitness franchise?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
, the Gross Revenue Report by an electronic transfer of data via the POS System at the times and interims then specified by Franchisor.
- 6.1.4 Method of Payment. Franchisee shall, together with the submission of the Gross Revenue Report, pay Franchisor the Royalty Fee and the Brand Fund Contribution, as defined, and more particularly described in Article 13, then due. At Franchisor's request, Franchisee must execute documents that allow Franchisor to automatically take the Royalty Fee and Brand Fund Contribution due as well as other sums due Franchisor, from business bank accounts via electronic funds transfers. Franchisee's failure to allow electronic funds transfers on an ongoing basis is a material breach of this Agreement. Franchisor reserves the right to modify the method and frequency of collection of the Royalty Fee and Brand Fund Contribution upon ninety (90) days' prior notice to Franchisee.
- 6.2. Late Fee. If the Royalty Fee, Brand Fund Contribution, or any Gross Revenue Reports are not received by Franchisor as required by this Agreement, Franchisee shall pay to Franchisor, in addition to the overdue amount, a late fee of Seventy-Five Dollars ($75.00). This late fee is reasonably related to Franchisor's costs resulting from the delay in payment and/or receipt of any report, is not a penalty, and is in addition to any other remedy available to Franchisor under this Agreement for Franchisee's failure to pay the Royalty Fee, the Brand Fund Contribution, and/or submit Gross Revenue Reports in accordance with the terms of this Agreement.
- 6.3. Interest. Any and all amounts that shall become due and owing from Franchisee to Franchisor under the terms hereof shall bear interest from the date due until paid at the rate of 18% per annum or at the highest rate permitted by law, whichever is lower.
- 6.4.
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, when a franchisee submits the Gross Revenue Report, they must also pay the Royalty Fee and the Brand Fund Contribution. These fees are defined and described in Article 13 of the Franchise Agreement. Fly Fitness may request that franchisees authorize electronic funds transfers from their business bank accounts to cover these fees and other amounts owed to Fly Fitness. Failure to allow electronic funds transfers is considered a material breach of the agreement. Fly Fitness retains the right to change the method and frequency of collecting the Royalty Fee and Brand Fund Contribution, providing 90 days' notice.
If the Royalty Fee, Brand Fund Contribution, or the Gross Revenue Reports are not received on time, Fly Fitness will charge a late fee of $75.00, in addition to the overdue amount. The Brand Fund Contribution is 2% of the weekly Gross Revenue generated by the Franchised Business. If a Fly Fitness franchisee fails to report Gross Revenue on time, Fly Fitness can collect 120% of the last Brand Fund Contribution payable, and will reconcile the amounts when Gross Revenue is eventually reported.
This means that, on a weekly basis, a Fly Fitness franchisee must calculate their gross revenue, submit a report to Fly Fitness, and remit both the royalty fee (as defined in Article 13) and 2% of gross revenue for the Brand Fund Contribution. Franchisees should ensure they understand how these fees are calculated and the deadlines for submission to avoid late fees or potential breaches of the franchise agreement. The ability for Fly Fitness to mandate electronic fund transfers provides convenience but also necessitates careful monitoring of bank accounts to ensure sufficient funds are available to cover the payments.