What condition must be met for Bigfoot Forestry to increase fees based on CPI?
Bigfoot_Forestry Franchise · 2025 FDDAnswer from 2025 FDD Document
CPI Adjustments: All fees (and minimum fees) expressed as a fixed dollar amount are subject to adjustment based on changes to the United States Consumer Price Index (CPI). We may periodically review and increase these fees based on changes to CPI, but only if the increased CPI is more than 5% higher than the corresponding CPI in effect on: (a) the effective date of the Franchise Agreement (for the initial fee adjustment); or (b) the date we implemented the last fee adjustment (for subsequent fee adjustments). We will notify you of any CPI adjustment at least 60 days before the fee adjustment becomes effective. We may implement no more than 1 fee adjustment during any 5-year period.
Source: Item 6 — OTHER FEES (FDD pages 12–15)
What This Means (2025 FDD)
According to Bigfoot Forestry's 2025 Franchise Disclosure Document, the company can adjust fixed dollar amount fees based on changes to the United States Consumer Price Index (CPI). However, Bigfoot Forestry can only increase these fees if the increased CPI is more than 5% higher than the corresponding CPI in effect. This is measured either from the effective date of the Franchise Agreement for the initial fee adjustment, or from the date Bigfoot Forestry implemented the last fee adjustment for subsequent adjustments.
Bigfoot Forestry must also provide franchisees with at least 60 days' notice before any CPI-based fee adjustment takes effect. Furthermore, the company can implement no more than one fee adjustment during any 5-year period. This provides some predictability for franchisees in terms of potential fee increases.
This CPI adjustment clause is fairly common in franchising to account for inflation and maintain the real value of fees over time. However, the 5% threshold and the 5-year limitation provide some protection to franchisees against frequent or excessive fee increases due to inflation. Prospective franchisees should monitor CPI trends and factor potential adjustments into their financial projections.