When will Red Wagon Club 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 franchisees will receive a portion of the membership fees collected from their Red Wagon Club location's members on a monthly basis. The timing of this payment, occurring by the 10th of each month, allows franchisees to have a consistent revenue stream to manage their business operations. It is important for franchisees to understand that this payment is based on the fees collected in the previous month, so there will be a slight delay between when the fees are collected and when the franchisee receives their share.

It's also worth noting that the FDD mentions that currently, Red Wagon Club's affiliate, OpCo, handles the membership agreements and fee collection, remitting one-third of the dues to the franchisee. However, Red Wagon Club retains the right to shift this responsibility to the franchisee, in which case the franchisee would collect the fees and remit two-thirds to Red Wagon Club. This potential change could impact the franchisee's cash flow management and administrative responsibilities, so it's crucial to stay informed about any such changes.