How is the Royalty Fee calculated for a Hyper Kidz franchise?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
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Item 6: OTHER FEES
| Fees (1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty Fee (2) | 6% of Gross Sales | Payable on Tuesday of each week (or the next business day if any Tuesday is not a business day) | Royalty Fees are calculated based on Gross Sales for the previous week ending Sunday. Amounts due will be withdrawn by EFT from your designated bank account. |
| Brand Development Fee | 2% of Gross Sales | Payable at the same time and in the same manner as the Royalty Fee | You must contribute when we establish the Brand Development Fund. The Brand Development Fund is described in Item 11. |
| Local Marketing | 2% of Gross Sales | Must be spent monthly | You will spend this money directly with your local marketing vendors or us. All marketing must be approved by us before you use it. |
Source: Item 6 — OTHER FEES (FDD pages 10–15)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, the Royalty Fee is 6% of Gross Sales. This fee is payable on Tuesday of each week, or the next business day if Tuesday is not a business day. The Royalty Fee is calculated based on Gross Sales for the previous week ending on Sunday.
Hyper Kidz will withdraw the Royalty Fee from the franchisee's designated bank account through electronic funds transfer (EFT). Each Monday, the franchisee must report their Gross Sales for the previous week. If a franchisee fails to report Gross Sales, Hyper Kidz may debit the account for 120% of the last Royalty Fee and Brand Development Fee that was debited.
If the amount debited is less than what is actually owed, Hyper Kidz will debit the account for the balance once the true Gross Sales are determined. Conversely, if the debit is greater than what is owed, Hyper Kidz will credit the excess against the next payment due. This ensures that the Royalty Fee accurately reflects the franchisee's sales performance each week.