Common use of Continuing Royalty Clause in Contracts

Continuing Royalty. In addition to the initial fee, during the initial ------------------ term of this Agreement, and for so long thereafter as Franchise Owner realizes Gross Receipts (as defined in Section 5.7), Franchise Owner agrees to pay to Franchisor a continuing monthly royalty fee (the "Continuing Monthly Royalty Fee") in the amount equal to nine percent (9%) of the first $1,000,000 of Gross Receipts during each calendar year, seven percent (7%) of the next $1,000,000 of Gross Receipts during each calendar year, and five percent (5%) of all Gross Receipts in excess of $2,000,000 during each calendar year. The dollar amounts subject to the 9%, 7% and 5% royalty percentage rates ("Dollar Amounts") shall be subject to annual revision as provided herein. On each January 1st, the Dollar Amounts shall be multiplied by a fraction (the "Fraction") determined as follows: The numerator shall be equal to the Consumer Price Index for all Urban Consumers, Medical Care Component ("index"), published for the preceding October by the United States Bureau of Labor Statistics. The denominator shall be the index published for the month one (1) year prior to the month used in calculating the numerator. The Dollar Amounts shall be replaced with the product resulting from multiplying each Dollar Amount by such Fraction rounded down to the nearest One Dollar ($1.00), but not less than the then-existing Dollar Amounts. All royalty payments due Franchisor during the calendar year of the adjustment shall be calculated based on the replacement Dollar Amounts. If the index is changed such that the base year differs for the two months used in determining the Fraction, the index shall be converted in accordance with the conversion factor published by the United States Department of Labor, Bureau of Labor Statistics. If the index is discontinued or revised during the term of this Agreement, such other governmental index or computation with which it is replaced shall be used to obtain substantially the same result as would be obtained if the index had not been discontinued or revised.