What is the maximum royalty rate that Angry Chickz can charge?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
Royalty revenue – Royalty revenues represent royalties earned from each of the franchisees in accordance with the franchise disclosure document and the franchise agreement for use of the Angry Chickz name, menus, processes, and procedures. The royalty rate in the franchise agreement is up to seven percent of the gross sales of each restaurant operated by each franchisee. Royalty fee revenue from franchised restaurants is recognized in the period earned and is payable to the Company weekly or monthly when the sales are reported by the franchisees.
Brand fund revenue – Brand fund revenues represent payments made by the franchisee to the Company for the brand development fund (Brand Fund) in accordance with the franchise disclosure document, and the franchise agreement. The Brand Fund fee rate is up to 2% of the gross sales of each restaurant operated by each franchisee. Brand Fund revenue is recognized weekly or monthly, while expenditures will be included in advertising expenses. Expenditures of the Brand Fund will primarily be amounts paid to third parties but may also include personnel expenses and allocated costs from the Member.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)
What This Means (2025 FDD)
According to Angry Chickz's 2025 Franchise Disclosure Document, the royalty rate in the franchise agreement can be up to 7% of the gross sales of each restaurant operated by the franchisee. This royalty fee is for the use of the Angry Chickz name, menus, processes, and procedures. Franchisees must pay this royalty weekly or monthly when they report their sales to Angry Chickz.
In addition to the royalty fee, Angry Chickz also charges a brand fund fee. This fee can be up to 2% of the gross sales of each restaurant. The brand fund revenue is also recognized weekly or monthly. These funds are used for brand development, primarily paid to third parties, but may also include personnel expenses and allocated costs from the Member.
For a prospective franchisee, it is important to understand that these fees are a percentage of gross sales, not profits. This means that franchisees must pay these fees regardless of whether their restaurant is profitable. It is also important to note that these are the maximum rates that Angry Chickz can charge, and the actual rates may be lower. A prospective franchisee should confirm the exact royalty and brand fund fee percentages in their franchise agreement.