FDD Talk 2.0: The Pita Pit’s Highest and Lowest Net Sales System Wide (2012 FDD)

(Ambrosio’s note:  Welcome to FDD Talk 2.0, a more comprehensive version of our flagship content, featuring not only the Item 19 financial performance representations of select franchises, but their estimated initial investment, unit growth, and other key items of their 2012 FDD as well.)

Highlights of The Pita Pit’s 2012 Franchise Disclosure Document – Part 3

Other Fees Under the Franchise Agreement

• Continuing Fee (i.e. Royalty):  6% of Gross Sales with no cap on monthly Gross Sales. For a limited time only, the Pita Pit is offering the following Continuing Fee structure. At the conclusion of the limited time offer, only executed Franchise Agreements will be eligible for these special terms:

• 5% of Gross Sales with a monthly Continuing Fee cap at $70,000 per month Gross Sales or

• If you are qualified and enter additional new Franchise Agreements (either for a new location or an existing corporate location, but not as part of a transfer with another franchisee), then your 2nd and 3rd Franchise Agreements are 5% of Gross Sales with a monthly Continuing Fee cap at $70,000 per month Gross Sales.

• Provided you are still a party to and not in default of your 1st, 2nd, and 3rd Franchise Agreements, your 4th, 5th, and 6th Franchise Agreements are 4.5% of Gross Sales with a monthly Continuing Fee cap at $70,000 per month Gross Sales. Your 1st, 2nd, and 3rd Franchise Agreements will also be reduced from 5% to 4.5% upon the opening of your 4th restaurant.

• Provided you are still a party to and not in default of your 1st through 6th Franchise Agreements, your 7th and any additional Franchise Agreements are 4% of Gross Sales with a monthly Continuing Fee cap at $70,000 per month Gross Sales. Your 1st through 6th Franchise Agreements will also be reduced from 4.5% to 4% upon the opening of your 7th restaurant, or

• If you purchase an existing corporately owned The Pita Pit restaurant, not eligible for a more favorable monthly Continuing Fee as set forth above, then:

• Years 1 – 3:  4% of Gross Sales with a monthly Continuing Fee cap at $70,000 per month Gross Sales

• Years 4 – 10:  5% of Gross Sales with a monthly Continuing Fee cap at $70,000 per month Gross Sales, and

• Renewal term:  the Continuing Fee for the final year of the Initial Term of the then current form of Franchise Agreement for new franchisees

• General Advertising Fund:  up to 2% of total Gross Sales.

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