Is the AE Royalty for a Beverly Anns Cookie franchise fixed for the term of the agreement?
Beverly_Anns_Cookie Franchise · 2025 FDDAnswer from 2025 FDD Document
If you purchase Additional Equipment, you will be required to pay additional royalty fees per piece of Additional Equipment that you purchase ("AE Royalty"). The AE Royalty will depend on the type of Additional Equipment and will be the then-current rate at the time you enter into the Additional Equipment Amendment. The AE Royalty will be due for as long as you own the Additional Equipment. For this Franchise Agreement, all references to Royalty shall include any AE Royalty unless otherwise noted.
Source: Item 23 — RECEIPTS (FDD pages 57–235)
What This Means (2025 FDD)
According to the 2025 Beverly Anns Cookie Franchise Disclosure Document, the AE Royalty, which is the royalty fee for Additional Equipment, is not fixed for the term of the agreement. The AE Royalty will depend on the type of Additional Equipment purchased and will be the then-current rate at the time the franchisee enters into the Additional Equipment Amendment. This royalty is due for as long as the franchisee owns the Additional Equipment.
This means that while the franchisee will pay the AE Royalty for as long as they own the additional equipment, the rate itself is subject to change based on what the current rate is when the franchisee acquires the additional equipment. This is a crucial consideration for prospective franchisees as it introduces an element of uncertainty in projecting long-term costs.
Franchisees should be aware that the cost of the AE Royalty could fluctuate over time, potentially impacting their profitability. It is important to factor in possible future adjustments to the AE Royalty when evaluating the financial viability of investing in additional equipment for a Beverly Anns Cookie franchise.