How does Golden Krust Caribbean Restaurant collect the royalty and national advertising fund fees?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
he initial franchise fee.
ITEM 6. OTHER FEES
| Type of Fee1 | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty | 5% of Gross Sales2 or | Payable weekly | See Note 2 for the definition of |
| $250 weekly, whichever is greater | by our sweep via EFT | "Gross Sales." Gross Sales are reported on the 3rd business day of the month, but we reserve the right to change this. | |
| National | 1.5% of Gross Sales | Payable weekly | An additional 1% of annual Gross |
| Advertising Fund | by our sweep via EFT | Sales mus |
Source: Item 6 — OTHER FEES (FDD pages 11–13)
What This Means (2024 FDD)
According to Golden Krust Caribbean Restaurant's 2024 Franchise Disclosure Document, the royalty and national advertising fund fees are collected weekly via electronic funds transfer (EFT). The royalty fee is 5% of Gross Sales or $250 weekly, whichever is greater. Gross Sales are reported on the 3rd business day of the month, but Golden Krust Caribbean Restaurant reserves the right to change this.
The national advertising fund fee is 1.5% of Gross Sales, also payable weekly by EFT. In addition to this, franchisees must spend an additional 1% of annual Gross Sales on local store marketing initiatives.
Gross Sales are defined as the total revenue from all products and services, including cash and credit sales, whether from the premises, delivery, catering, or other methods. Gross Sales do not include sales taxes, proceeds from gift cards, or guest refunds made in good faith. Franchisees cannot reduce Gross Sales by the amount of any discounts provided to employees, family members and other businesses that they control.
The use of EFT for payments is a fairly standard practice in franchising, providing convenience and efficiency for both the franchisee and franchisor. Franchisees should ensure they understand how Gross Sales are calculated and reported to avoid discrepancies or issues with fee payments.