How is the adjusted fee calculated by Bigfoot Forestry based on CPI changes?
Bigfoot_Forestry Franchise · 2025 FDDAnswer from 2025 FDD Document
CPI Adjustments.** We may periodically adjust all fees (including minimum fees) expressed as a fixed dollar amount based on changes to the U.S.
Consumer Price Index (CPI).
We may periodically review and increase these fees based on CPI changes, but only if the then-current CPI ("Current CPI") is more than 5% higher than the corresponding CPI in effect on: (a) the Effective Date of this Agreement (for the initial fee adjustment); or (b) the date we implemented the last fee adjustment (for subsequent fee adjustments) ("Baseline CPI").
The adjusted fee is calculated by multiplying the current fee by the sum of one (1) plus a fraction: (a) the numerator of which is Current CPI minus Baseline CPI; and (b) the denominator of which is Baseline CPI.
We may utilize any CPI index series published by the U.S.
Department of Labor or any comparable Governmental Authority that we deem appropriate.
We currently use the following index: All Urban Wage Earners and Clerical Workers (CPI-W), U.S.
City Average (1982-84 = 100), "All Items".
We will notify you of any CPI adjustment at least 60 days before it becomes effective.
We may implement no more than one (1) fee adjustment during any five (5) year period.
If we decline to exercise our right to increase fees in a given five (5) year period despite a 5% or greater CPI increase, that potential fee increase will accumulate and may be carried forward and applied in connection with a subsequent fee adjustment.
Source: Item 23 — RECEIPT (FDD pages 42–162)
What This Means (2025 FDD)
According to Bigfoot Forestry's 2025 Franchise Disclosure Document, the company may periodically adjust fees that are expressed as a fixed dollar amount based on changes to the U.S. Consumer Price Index (CPI). However, Bigfoot Forestry can only review and increase these fees if the current CPI is more than 5% higher than the baseline CPI, which is either the CPI in effect on the agreement's effective date for the initial adjustment, or the date of the last fee adjustment for subsequent adjustments.
The adjusted fee is calculated by multiplying the current fee by the sum of one (1) plus a fraction. The fraction's numerator is the Current CPI minus the Baseline CPI, and the denominator is the Baseline CPI. Bigfoot Forestry may use any CPI index series published by the U.S. Department of Labor or a comparable Governmental Authority. Currently, Bigfoot Forestry uses the All Urban Wage Earners and Clerical Workers (CPI-W), U.S. City Average (1982-84 = 100), "All Items" index.
Bigfoot Forestry will notify franchisees of any CPI adjustment at least 60 days before it takes effect. Fee adjustments can occur no more than once every five years. If Bigfoot Forestry chooses not to increase fees during a five-year period despite a qualifying CPI increase, the potential fee increase can accumulate and be applied in a later fee adjustment. This policy allows Bigfoot Forestry to maintain the real value of its fees over time, but it also introduces a degree of uncertainty for franchisees, as fees could increase significantly after a period of sustained inflation.