Fees

The Fees clause contains the general payment obligations commonly found in distribution, franchise or license agreements.

Our standard clause lets the parties choose between a simple one-time fee, or the opportunity for the parties to agree on their own royalties schedule, more complex than those we provide in our variants, to incorporate into the agreement via attachment.

Our variants include options for basic royalty schedules calculated off net sales, minimum fees due regardless of net sales over a payment period, and which party will be responsible for taxes related to the fees. Some Fees clauses deal with interest on late payments. We include the interest provision in our Invoices clause, which also provides for how billing and payment is handled.

If using a royalty fee schedule, and not just a one-time payment, the parties will need to agree on a Payment Period, the period overwhich the royalties owed are calculated and paid, and choose in the clause language the appropriate term for the goods or sales the royalties apply to (i.e. are these the net sales of Licensed Goods, or the net sales of all the products or services sold at this particular Franchise location?).

Clause Text

Key Question: One-time payment or royalties, and who pays the taxes?  Jump to Standard

Neutral Standard

1.  Fees

1.1. Initial Fee. The [PARTY B] shall pay the [PARTY A] an Initial Fee of  $ [INITIAL FEE], due within [FEE DUE PERIOD] business days' of the effective date of this agreement.

1.2. Royalty Fees. The [PARTY B] shall pay the [PARTY A] the Royalty Fee of [ROYALTY FEE PERCENTAGE] percent of the net sales of the [Licensed Goods / Franchise Location] every Payment Period, due within [ROYALTY FEE DUE PERIOD] business days' of the end of the applicable Payment Period.

1.3. Payment Period. A Payment Period in this agreement is [PAYMENT PERIOD] ("Payment Period").

1.4. Taxes. The [PARTY A] will be responsible for any taxes, import or export fees, duties, or similar charges related to the fees paid to the [PARTY A].

1.  Fees

1.1. Initial Fee. The [PARTY B] shall pay the [PARTY A] an Initial Fee of  $[INITIAL FEE], due within [FEE DUE PERIOD] business days' of the effective date of this agreement.

1.2. Royalty Fees. The [PARTY B] shall pay the [PARTY A] the Royalty Fee of [ROYALTY FEE PERCENTAGE] percent of the net sales of the [Licensed Goods / Franchise Location] every Payment Period, due within [ROYALTY FEE DUE PERIOD] business days' of the end of the applicable Payment Period.

1.3. Payment Period. A Payment Period in this agreement is [PAYMENT PERIOD] ("Payment Period").

1.4. Taxes. The [PARTY B] will be responsible for any taxes, import or export fees, duties, or similar charges related to the fees paid to the [PARTY A].

1.  Fees

1.1. Initial Fee. The [PARTY B] shall pay the [PARTY A] an Initial Fee of  $ [INITIAL FEE], due within [FEE DUE PERIOD] business days' of the effective date of this agreement.

1.2. Royalty Fees. The [PARTY B] shall pay the [PARTY A] the Royalty Fee of [ROYALTY FEE PERCENTAGE] percent of the net sales of the [Licensed Goods / Franchise Location] every Payment Period, due within [ROYALTY FEE DUE PERIOD] business days' of the end of the applicable Payment Period.

1.3. Minimum Fee. If the Royalty Fees for any given Payment Period would be less than $ [ROYALTY FEE THRESHOLD], instead of paying the [Royalty Fees] to the [PARTY A], the [PARTY B] will pay the Minimum Royalty of $ [MINIMUM ROYALTY FEE].

1.4. Payment Period. A Payment Period in this agreement is [PAYMENT PERIOD] ("Payment Period").

1.5. Taxes. The [PARTY B] will be responsible for any taxes, import or export fees, duties, or similar charges related to the fees paid to the [PARTY A].

9. Subscription Fees. The Customer shall pay to the Company the subscription fees set forth in Schedule [C].

 Fees[PARTY B] shall pay the required fees under each statement of work to [PARTY A] in accordance with the payment terms.

Fees. [PARTY A] shall pay [PARTY B] according to the fee schedule listed in [NAME OF FEE SCHEDULE], attached to this agreement.

Subscription Fees. [PARTY B] shall pay to [PARTY A] the subscription fees listed in Schedule [C]. 

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