What is the minimum monthly royalty fee for a Bor Restoration franchise?
Bor_Restoration Franchise · 2024 FDDAnswer from 2024 FDD Document
| TYPE OF FEE (Note 1) | AMOUNT | DUE DATE | REMARKS |
|---|---|---|---|
| Royalty | The greater of 7% of "Gross Sales" on water, fire, contents cleaning, and mold remediation services, plus 5% on any after-remediation repair services (each being the "Percentage Royalty") or $500 (Minimum Royalty). (Note 2) | or before the 16th day of each month. If the 16th falls on a Saturday, Sunday, or federal or state holiday, the Royalty will be | Payable to us through an automated clearinghouse (ACH) transaction. |
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- The Minimum Royalty will never be less than $500 during the initial term of the Franchise Agreement. The Minimum Royalty may increase in the 36th month and seventy-second month of the initial term to reflect an increase in the Consumer Price Index for all urban consumers (CPI-U) as quoted by the U.S. Bureau of Labor Statistics. We will start billing for Royalties and all other fees collected with the Royalty 45 days after your "Opening Date." (Item 11).
"Gross Sales" means all revenue and income actually received by you from the operation of your Business, including all revenue received from Clients you directly bill, and also includes all revenue received from a Client's insurance carrier, late fees, revenue generated over the billed amount, and any other amount charged to Clients, whether received in cash, in services in kind, from barter or exchange, on credit or otherwise. You may deduct from Gross Sales all sales tax or similar taxes, which by law are chargeable to Clients by any taxing authority and are collected by you. You may not deduct the amount of any documented discounts, refunds, or credits.
Source: Item 6 — Other Fees (FDD pages 10–15)
What This Means (2024 FDD)
According to Bor Restoration's 2024 Franchise Disclosure Document, a franchisee must pay a monthly royalty fee. The royalty fee is calculated as the greater of 7% of gross sales on specific services, plus 5% on after-remediation repair services, or a minimum royalty of $500.
This means that even if a Bor Restoration franchise has low sales in a particular month, they are still obligated to pay a minimum royalty of $500. The 7% applies to gross sales from water, fire, contents cleaning, and mold remediation services, while the 5% applies to any after-remediation repair services. Gross sales include all revenue and income received from the business operation, including payments from clients and insurance carriers, late fees, and any other amounts charged to clients.
The $500 minimum royalty fee may increase during the initial term of the Franchise Agreement, specifically in the 36th and 72nd months. These increases will reflect changes in the Consumer Price Index for all urban consumers (CPI-U) as reported by the U.S. Bureau of Labor Statistics. Bor Restoration will begin billing for royalties and other fees 45 days after the franchisee's opening date.