Royalty: 60% of the first $5,000 of revenue received by the Franchised Business during each calendar year for Authorized Services, less applicable sales taxes collected and remitted to appropriate taxing authorities, and less revenue from the sale of products or services subject to a Product-Specific Royalty Rate, incentive rates paid to Franchisee, or otherwise designated as royalty-free (50% if paid within 4 days after the end of the Reporting Period to which the royalty relates and no other amounts payable are overdue) and 40% on the revenue received during each calendar year in excess of $5,000 (30% if paid within 4 days after the end of the Reporting Period to which the royalty relates and no other amounts payable are overdue). 

However, revenue in any calendar year that is in excess of the average revenue of the Franchisee for the 2 previous calendar years is subject to a Royalty Fee of 20% if paid not later than 4 days after the end of the Reporting Period to which the royalty relates.  You are not eligible for the 20% royalty rate (the “Incentive Royalty Rate”) until you have completed 2 full Tax Seasons and have established your own incentive base. Revenue from business services is subject to a Product Specific Royalty Rate of 15% (10% if paid within 4 days after the end of the reporting period to which the royalty relates and no other amounts payable are overdue).  Revenue from fees charged for a Second Look review is subject to a 20% Product Specific Royalty Rate.  Revenue from the sale of certain products is royalty-free.