When is the deadline for Red Wagon Club to remit the 'Membership Fee Payment' to the franchisee?

According to Red Wagon Club's 2024 Franchise Disclosure Document, the Membership Fee Payment, which is one-third of the membership fees paid by members of the franchisee's Red Wagon Club business, will be remitted to the franchisee on or before the 10th day of each calendar month. This payment covers membership fees collected during the preceding month.

This arrangement means that Red Wagon Club franchisees can expect to receive a portion of the membership fees they generate by the 10th of each month. This consistent monthly payment can help franchisees manage their cash flow and cover operating expenses. It is important for prospective franchisees to understand how membership fees are collected and distributed, as this revenue stream is a key component of their income.

It's worth noting that while the franchisee receives one-third of the membership fees, Red Wagon Club retains two-thirds. The FDD also mentions that currently, Red Wagon Club's affiliate, OpCo, enters into Membership Agreements with the Members and collects the membership fees, then remits one third to the franchisee. However, Red Wagon Club may elect to have the franchisee enter into these agreements directly with clients, in which case the franchisee would collect the fees and remit two-thirds to Red Wagon Club each month. Franchisees should clarify with Red Wagon Club which method is currently in practice and understand the implications for their accounting and administrative responsibilities.