Which sections of the Monicals Pizza Franchise Agreement address the franchisee's obligation to pay fees?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
ITEM 5. INITIAL FEES
Franchise Agreement
You must pay a $45,000 lump sum franchise fee when you sign the Franchise Agreement. You pay a $30,000 lump sum franchise fee when you sign the Franchise Agreement for a second and subsequent
franchise. If you are a Monical's Pizza employee, you pay a lump sum franchise fee of $45,000, less $1,000 for every year of your employment with Monical's Pizza, with a minimum franchise fee of $25,000. Otherwise, the franchise fee is uniform for all franchisees.
We will refund 50% of the franchise fee you paid if we terminate the franchise for your failure to perform your pre-opening obligations under the Franchise Agreement. We do not give refunds under other circumstances.
We previously offered a standard royalty of 2% to one franchisee who renewed the Franchise agreement. We are no longer offering discounted royalties.
Development Agreement
You must pay a development fee if and when you sign a Development Agreement. The development fee is paid to us in a lump sum and is nonrefundable. The development fee is equal to $15,000 for each Monical's restaurant you agree to develop in addition to the franchise fee. The number of Monical's restaurants you will open will be determined before you sign the Development Agreement.
For example, assuming you agree to develop 5 Monical's restaurants, your initial investment will include a franchise fee of $30,000 for the first Monical's restaurant and a development fee of $60,000 for the remaining 4 Monical's restaurants to be developed in the future.
Each time you sign a Franchise Agreement for one of the additional Monical's restaurants, you must pay us $15,000 which is the balance of the discounted franchise fee for that franchise.
The development fee is calculated uniformly for all developers, but the amount of the actual fee will vary based on the number of Monical's restaurants you agree to develop.
ITEM 6. OTHER FEES
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty Fee | 4% of gross sales | 10th day of each month | You must pay your royalty fee directly to us. See definition of gross sales.1 |
| Marketing Fund Contribution | Currently, there is no marketing fund. | 10th day of each month | If a marketing fund is established, you will pay your marketing fund contribution to us. We will give you 30 days’ notice before we establish a marketing fund or increase required contributions. |
| Cooperative Advertising | Any or all of the marketing fund contribution plus any or all of required local advertising may be designated for cooperative advertising | As directed | We may establish and administer a cooperative advertising program within your regional marketing area. This fee is payable to us or to an advertising cooperative. There are currently no advertising cooperatives. |
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 18–20)
What This Means (2025 FDD)
According to the 2025 Monicals Pizza Franchise Disclosure Document, several sections outline the franchisee's obligation to pay fees. Section 3.1 defines the 'Franchise Fee'. Item 5 details the initial franchise fee, which is a $45,000 lump sum payable upon signing the Franchise Agreement. For subsequent franchises, the fee is reduced to $30,000. Monicals Pizza employees may receive a discount of $1,000 for each year of employment, with a minimum fee of $25,000. A portion of the franchise fee (50%) is refundable if Monicals Pizza terminates the agreement due to the franchisee's failure to meet pre-opening obligations.
If a franchisee signs a Development Agreement, they must pay a development fee, which is nonrefundable. This fee is $15,000 for each Monicals Pizza restaurant the franchisee agrees to develop. For instance, developing five restaurants would involve a $30,000 franchise fee for the first location and a $60,000 development fee for the remaining four. Each subsequent Franchise Agreement requires a payment of $15,000, representing the balance of the discounted franchise fee.
Item 23 also mentions fees, stating that upon termination of the Franchise Agreement, the franchisee must pay all sums owing to Monicals Pizza, including unpaid Royalty Fees, damages, costs, and expenses, such as attorneys' fees related to litigation or bankruptcy proceedings, and loss of future royalty fee payments. Additionally, any sums not paid to Monicals Pizza when due will accrue interest at a rate of 18% per annum until full payment is received.