How is the Royalty fee for Bor Restoration payable?
Bor_Restoration Franchise · 2024 FDDAnswer from 2024 FDD Document
OTHER FEES**
| 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. |
Source: Item 6 — Other Fees (FDD pages 10–15)
What This Means (2024 FDD)
According to Bor Restoration's 2024 Franchise Disclosure Document, the royalty fee is payable on or before the 16th day of each month. If the 16th falls on a Saturday, Sunday, or federal or state holiday, the royalty payment will be due on the next business day.
The royalty fee is calculated as the greater of 7% of "Gross Sales" on water, fire, contents cleaning, and mold remediation services, plus 5% on any after-remediation repair services, or a minimum royalty of $500. Gross sales include all revenue and income actually received by the franchisee from the operation of the business, including revenue from clients they directly bill, revenue 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. Franchisees may deduct sales tax or similar taxes chargeable to clients and collected by them, but may not deduct documented discounts, refunds, or credits.
The royalty fee must be paid to Bor Restoration through an automated clearinghouse (ACH) transaction. This means that Bor Restoration will automatically withdraw the royalty payment from the franchisee's bank account each month. This is a common practice in franchising, as it ensures that royalty payments are made on time and reduces the administrative burden on both the franchisor and the franchisee.
It is important for prospective Bor Restoration franchisees to understand how the royalty fee is calculated and when it is due. Franchisees should also be aware that the minimum royalty fee may increase in the 36th and 72nd 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. Franchisees should budget accordingly to ensure that they can afford to pay the royalty fee on time each month.