Are 1 800 Packouts franchisees required to pay royalties monthly?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
on limit. Should the population exceed 1,250,000 people during the term of your agreement the population fee will increase at the same rate of $500 per each 250,000 people detailed in the table above (i.e., 1,000,001 to 1,250,000 would be $2,500 per month). Your NROP Fee is owed regardless if whether you enroll in all, some, or none of the NROP programs.
D. ROYALTY FEES
You must pay us a monthly royalty fee (the "Royalty Fee") equal to 7% of the monthly Gross Sales of the Franchised Business. "Gross Sales" means all revenue of the Franchised Business, including all sales of products and services to customers of the Franchised Business, but excluding excise, sales and use taxes, gross receipts taxes or similar taxes you pay based on revenues, if those taxes are separately stated when the customer is charged, and also excluding bona fide refunds actually paid to customers. If we reasonably determine any fee based upon your Gross Sales is not permissible under applicable law, then we and you will negotiate an alternative basis for payment and, if we and you cannot agree, we or you may terminate this Agreement, but all of your post-termination obligations under Section 16 (Obligations Upon Termination or Expiration of the Agreement) shall apply upon any such termination. The Royalty Fees do not represent payment for the referral of customers to you, and you acknowledge and agree that the services we offer to you and our other franchisees do not include the referral of customers.
E. MARKETING FEE
You must contribute 3% of the monthly Gross Sales of the Franchised Business (the "Marketing Fee") to a national advertising fund (the "Brand Fund") that we will administer. See Section E. (Brand Fund) for a description of the Brand Fund.
F. Quick Start Packate or "QSP" and QSP Fee
You will buy from us our Quick Start Package ("QSP"), and pay us the QSP Fee applicable to your franchise size. Your QSP will include initial equipment to outfit your cleaning room, initial supplies for your operations, a starting supply of consumables (such as tags, gloves, tape, shoe covers, etc.), inventory for 1-800-Packouts branded boxes for your first jobs, and certain marketing and storage items.
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to the 2025 1 800 Packouts Franchise Disclosure Document, franchisees are required to pay a monthly royalty fee. The Royalty Fee is 7% of the monthly Gross Sales of the Franchised Business. Gross Sales includes all revenue from sales of products and services, but excludes certain taxes (excise, sales, use, and gross receipts taxes) if they are separately stated when the customer is charged, and also excludes bona fide refunds actually paid to customers.
The Royalty Fees and Marketing Fee (3% of monthly Gross Sales) are due via Electronic Funds Transfer (EFT) or another method prescribed by 1 800 Packouts. Payment is due upon the earlier of when payment is received from the client or 180 days following the initial service date with the client. Franchisees must notify 1 800 Packouts within three days of receiving any payment by uploading a copy of the check into the tracking system. Failure to do so may result in interest or penalties.
1 800 Packouts may require franchisees to authorize them to initiate debit or credit entries to their bank account for fee withdrawals. If a franchisee is delinquent in Royalty Fees or Marketing Fee payments three times in any 12-month period, 1 800 Packouts reserves the right to collect these fees on a weekly basis. This could create cash flow challenges for franchisees who fall behind on payments. Franchisees should ensure they have a system in place to track payments and report them promptly to avoid penalties and potential changes in payment schedules.