What is the minimum Royalty Fee amount for a Punch King Fitness franchise?
Punch_King_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
OTHER FEES**
| Name of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty Fee | 5% of Gross Revenues1 each month after opening ("Standard Royalty") and when open 6 full calendar months, Standard Royalty or $1,000 ("Minimum Royalty"), whichever is greater, each and every month thereafter | 4th of each month | Royalty Fees are payable by electronic funds |
Source: Item 6 — OTHER FEES (FDD pages 10–16)
What This Means (2024 FDD)
According to Punch King Fitness's 2024 Franchise Disclosure Document, after a franchisee has been open for six full calendar months, they will pay a royalty fee of 5% of gross revenues or $1,000, whichever is greater. This is referred to as the 'Minimum Royalty'.
In practical terms, this means that even if a Punch King Fitness franchise location has relatively low gross revenues, the franchisee must still pay a minimum royalty of $1,000 each month. This ensures that Punch King Fitness receives a baseline level of income from each franchise location, regardless of its performance.
For a prospective franchisee, this minimum royalty fee is an important factor to consider when projecting potential earnings and expenses. It highlights the importance of achieving a certain level of revenue to ensure profitability. The royalty fees are payable via electronic funds transfer on the 4th of each month.