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Monthly Management Service Fee (MMSF), invoicing timetable
Currently, we issue the invoices on the 1st working day of each month, dated 1st of the month. However, we have decided to modify this process and change the date to the 14th of each month.
The primary reason for this change is to reduce the number of invoices some of you are receiving. Presently, in certain cases where a top-up is required due to exceeding the minimum contract amount, some of you end up receiving two invoices per month instead of one and this is not ideal.
You will know that all contracts specify that everyone must pay either the stated MMSF or 2.5% of the previous month's TRUE report total, whichever amount is greater.
If you are curious about your individual trigger level that would attract a slightly higher cost, you can calculate it by dividing your current MMSF by 2.5%. For example, if your MMSF is £100, then 100/0.025 = £4,000. So, if your TRUE report total for the month exceeds £4,000, you will be charged a slightly higher fee than the minimum.
To provide some context, suppose your TRUE report total is £5,000 in the above example. In that case, the additional monthly fee above the committed £100 would be £25 for the extra £1,000 of revenue you have earned in the month.
This fee structure is a franchise hybrid structure which we chose a few years ago to provide House of Colour Ltd the certainty on our monthly revenue but to also provide some assurance to our franchise community on what they will be paying if they had a slow month. We have found that most franchises operate on a purely % of revenue basis which is typically 7-8% of revenue but we feel our structure is currently appropriate for our scale of business.
If you have any questions or need further clarification on this matter, please feel free to reach out to us.
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