How is the royalty fee for a Golden Krust Caribbean Restaurant franchise calculated?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
| 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. |
NOTE 2: "Gross Sales" means the aggregate amount of all revenues generated from the sale of all products and services sold and all other income of every kind related to the Restaurant, whether for cash or credit (and regardless of collection in the case of credit), whether from sales on the Premises, by delivery, from catering, or other sales methods (whether the sales method is permitted or not). You may not reduce Gross Sales by the amount of any discounts provided to employees, family members and other businesses that you control. Gross Sales do not include sales taxes or other taxes collected from guests for transmittal to the appropriate taxing authority, proceeds from the sale of gift cards or stored value cards, and guest refunds made in good faith.
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 fee is calculated as the greater of 5% of gross sales or $250 per week. This fee is payable weekly via electronic funds transfer (EFT). Gross sales are reported on the 3rd business day of the month, although Golden Krust Caribbean Restaurant reserves the right to change this reporting schedule.
"Gross Sales" for Golden Krust Caribbean Restaurant include all revenues from the sale of products and services, and all other income related to the restaurant. This encompasses cash and credit sales, sales on the premises, deliveries, catering, and any other sales methods, regardless of whether the method is explicitly permitted. Franchisees cannot reduce gross sales by the amount of any discounts provided to employees, family members, or other businesses they control.
However, gross sales do not include sales taxes or other taxes collected for transmittal to the appropriate taxing authority, proceeds from the sale of gift cards or stored value cards, and guest refunds made in good faith. This definition is important for franchisees to understand, as it directly impacts the calculation of their weekly royalty payments to Golden Krust Caribbean Restaurant. Franchisees need to maintain accurate records of all sales and ensure they are reporting gross sales correctly to avoid discrepancies and potential issues with the franchisor.