What are the two options for calculating the monthly royalty fee for an Amerispec Inspection Services franchise?
Amerispec_Inspection_Services Franchise · 2025 FDDAnswer from 2025 FDD Document
e, all fees are uniformly imposed.
Item 6: Other Fees
OTHER FEES
| Name of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalties | The greater of (i) 7% of monthly Gross Receipts; or (ii) a minimum of $280 per month, except that the minimum fee does not apply for first 90 days after opening the Franchised Business. | Payment Due Date (See Note 1) | See Note 2 for the definition of "Gross Receipts." See Note 3 for an explanation of the Royalties. If we are charged a tax by your state or an agency in your state on the fee that we receive from you (other than federal income ta |
Source: Item 6 — Other Fees (FDD pages 14–18)
What This Means (2025 FDD)
According to Amerispec Inspection Services's 2025 Franchise Disclosure Document, franchisees have two options for calculating the monthly royalty fee. The royalty fee is the greater of 7% of monthly Gross Receipts or a minimum of $280 per month. However, the minimum royalty fee is waived for the first 90 days after opening the Amerispec Inspection Services franchised business. Gross Receipts are defined as the total revenues received from all products and services offered by the franchised business.
This means that during the first three months of operation, an Amerispec Inspection Services franchisee only pays 7% of their gross receipts as a royalty fee, which can be a significant benefit when starting the business and revenues may be lower. After this initial period, the franchisee will pay whichever amount is higher: 7% of their gross receipts or the $280 minimum. This structure ensures that Amerispec Inspection Services receives a consistent royalty payment, even if a franchisee's sales fluctuate.
It's important to note that the royalty fee is due on the Payment Due Date, as specified in Note 1 of Item 6. Additionally, if a state or agency within the state charges Amerispec Inspection Services a tax on the royalty fee received from the franchisee, the franchisee is responsible for paying an additional royalty equal to the amount of the tax. Understanding these details is crucial for prospective franchisees to accurately forecast their ongoing expenses and manage their cash flow.