Franchise Continuing Licensing Fees

Description

Continuing Licensing Fees, per Section IX of the executed Franchise Agreement.

The Franchise Owner has agreed to pay the Franchisor (Motherboard) a Continuing Licensing Fee equal to six percent (6%) of The Click IT Store’s weekly Gross Revenues. Per this agreement, the Franchise Owner submits to Motherboard a weekly report which provides a summary of the Gross Revenues generated by The Click IT Store™ for each seven (7) day period commencing upon the opening of The Click IT Store™ each Sunday and ending at the close of business each Saturday (each such report shall be referred to herein as a “Weekly Report”).

The Franchise Owner submits each Weekly Report electronically by email to Motherboard Accounting. The Franchise Owner submits each Weekly Report by the Tuesday following the week to which each Weekly Report pertains.

The weekly service fees are collectively referred to in the Franchise Agreement as “Continuing Licensing Fees.” Franchise Owner has agreed to enable Motherboard to present a weekly bank draft on Franchise Owner’s bank account if it decides to, for the Continuing Licensing Fees, including, without limitation, as authorized by the Franchise Agreement as Attachment I. Franchise Owner hereby covenants to maintain enough funds in its account for the drafts initiated by Franchisor for Continuing Licensing Fees to be honored.

If a direct debit program is unavailable, Franchise Owner shall timely remit the Continuing Licensing Fees to the Franchisor as agreed upon independent of the Franchise Agreement. The Franchisor reserves the right to adopt other payment methods as the Franchisor deems reasonable, including, without limitation, remitting the Continuing Licensing Fees by U.S. Mail postmarked each Wednesday for the previous week (Monday through Sunday).

Brand Fund

Franchise Owner pays to the Brand Fund the amount of one percent (1%) of the Franchisee’s Click IT Store’s Weekly Gross Revenues, or $25 per week, whichever is greater. Franchisor uses the Brand Fund Contributions and any earnings of the Brand Fund for any costs associated with advertising, marketing, public relations, promotional programs and materials (which may be national or regional in scope), and/or any other activities that Motherboard believes it would benefit the System, including the following: social media such as Facebook, Twitter, etc.; advertising campaigns in various media; point-of-purchase materials; review of locally-produced ads; free standing inserts; brochures; purchasing and/or developing promotional materials; market research, including secret shoppers; sponsorships; design and maintenance of a website; celebrity endorsements; trade shows; association dues; search engine optimization costs; establishment of a third party facility for customizing local advertising; accounting costs; and holding an annual franchise convention. Motherboard uses the Brand Fund for any activity whose sole purpose is the marketing of franchises; however, Franchise Owner acknowledges that the Company’s website, public relations activities, community involvement activities, and other activities that may be supported by the Brand Fund may contain information about franchising opportunities. The franchisor will have the right to direct all programs supported by the Brand Fund, with final discretion over creative concepts, the materials, and media used in the programs and the placement. The franchisor does not guarantee that Franchise Owner will benefit from the Brand Fund in proportion to Franchise Owner’s contributions to the Brand Fund.

Beginning on the date that the first franchise opens for business, The Click IT Store™ operated by the Franchisor or its affiliated companies will contribute to the Brand Fund on the same basis as comparable franchises. Motherboard does not use any contributions to the Brand Fund to defray any of its general operating expenses, except for reasonable administrative costs and overhead that it incurs in activities reasonably related to the administration of the Brand Fund or the management of Brand Fund-supported programs (including salaries of Franchisor personnel who devote time to Brand Fund activities). Motherboard separately accounts for the Brand Fund, but it does not segregate Brand Fund monies from its other monies.

Motherboard is not required to have an independent audit of the Brand Fund and may spend in any fiscal year an amount greater or less than the aggregate contribution of all The Click IT Stores™ to the Brand Fund during that year or cause the Brand Fund to invest any surplus for its future use. Motherboard will make available an unaudited statement of contributions and expenditures for the Brand Fund no sooner than ninety (90) days after the close of the Franchisor’s fiscal year to Franchise Owners who make a written request for a copy.

Please note: A summary of pertaining sections of your Franchise Agreement is provided only for your convenience. This summary does not replace the original agreement as it stands. Please refer to your executed Franchise Agreement for all details and the accuracy of any section or statement.

When opening a business, there is a lot to keep track of. We understand and want to help. If you ever have any questions about your business, your relationship with us, the franchisor, or anything else, please do not hesitate to contact us at your earliest convenience.