When are Interim Franchise Royalty Fees due for a Punch King Fitness franchise?
Punch_King_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
| Name of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Interim Franchise Royalty Fees | Franchisor's then-current Royalty Fee plus 2% | 4th of each month when applicable | An Interim Franchise Fee applies if your Franchise Agreement expires, no renewal franchise agreement is signed, and you continue the franchise business operation. |
Source: Item 6 — OTHER FEES (FDD pages 10–16)
What This Means (2024 FDD)
According to Punch King Fitness's 2024 Franchise Disclosure Document, Interim Franchise Royalty Fees are due on the 4th of each month, when applicable. These fees consist of the franchisor's then-current Royalty Fee plus an additional 2%.
This fee applies specifically if a franchisee's Franchise Agreement expires, a renewal franchise agreement is not signed, and the franchisee continues to operate the franchise business. In such a scenario, Punch King Fitness assesses this interim royalty to compensate for the continued use of its brand and system during the period when a formal agreement is absent.
Prospective franchisees should be aware of this condition, as failing to renew the agreement while continuing operations triggers this additional fee. It is crucial to understand the implications and costs associated with operating under an expired agreement and to carefully consider the terms of renewal to avoid incurring these additional charges.