What are the two options for calculating the monthly royalty fee for a Bigfoot Forestry franchise?
Bigfoot_Forestry Franchise · 2025 FDDAnswer from 2025 FDD Document
to pay us an initial franchise fee in the amount set forth in Part B of ATTACHMENT "A" in one lump sum at the time you sign this Agreement. The initial franchise fee is fully earned by us and nonrefundable once this Agreement is signed.
- 13.2. Royalty Fee. On the 10th day of each month (the "royalty fee due date"), you must pay us a royalty fee equal to the greater of: (a) the minimum monthly royalty fee; or (b) the percentage-based royalty fee. The minimum royalty fee is: (i) $0 from the Effective Date through the end of the third (3rd) full month after the Effective Date; (ii) $500 per month for the fourth (4th), fifth (5th) and sixth (6th ) full months after the Effective Date; and (iii) $750 per month for the remainder of the Term. The minimum royalty fee applies regardless of whether your Business has opened; provided, however, that if you are unable to open by the beginning of the fourth (4th) month after the Effective Date due to our failure to timely perform our preopening obligations, we will not impose the minimum royalty fee until such time that we have fully performed our preopening obligations. The percentage-based royalty fee is calculated by applying the
Source: Item 23 — RECEIPT (FDD pages 42–162)
What This Means (2025 FDD)
According to Bigfoot Forestry's 2025 Franchise Disclosure Document, franchisees have two options for calculating the monthly royalty fee: a minimum monthly royalty fee or a percentage-based royalty fee. The franchisee will pay the greater of the two calculations.
The minimum royalty fee starts at $0 from the effective date through the end of the third full month. It then increases to $500 per month for months four, five, and six, and finally to $750 per month for the remainder of the term. This minimum fee applies regardless of whether the business is open, unless Bigfoot Forestry fails to meet its pre-opening obligations, in which case the fee is waived until those obligations are met.
The percentage-based royalty fee is determined by applying an 'applicable royalty rate' to the gross sales generated during the preceding month. The specific rates and sales brackets used to calculate this fee are detailed in a table within Part B of Attachment A of the Franchise Agreement. This means the franchisee's royalty payment will fluctuate based on their monthly revenue, potentially offering some relief during slower periods compared to a fixed royalty fee. However, it also means higher payments during peak earning months.