What services are included in the calculation of the 7% Royalty for Bor Restoration?
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 the greater of 7% of "Gross Sales" or $500. The 7% royalty applies to revenue from water, fire, contents cleaning, and mold remediation services. Additionally, a 5% royalty applies to any after-remediation repair services. This royalty is due on or before the 16th day of each month via an automated clearinghouse (ACH) transaction. If the 16th falls on a Saturday, Sunday, or federal or state holiday, the royalty will be due on the next business day.
"Gross Sales" for Bor Restoration includes all revenue and income actually received by the franchisee from the operation of the business. This includes revenue received directly from clients, from a client's insurance carrier, late fees, revenue generated over the billed amount, and any other amount charged to clients, regardless of whether it is received in cash, services in kind, barter, exchange, credit, or other forms. Franchisees can deduct sales tax or similar taxes that are chargeable to clients and collected by the franchisee from Gross Sales. However, franchisees may not deduct documented discounts, refunds, or credits from Gross Sales.
For a prospective Bor Restoration franchisee, understanding what constitutes "Gross Sales" is crucial for accurately calculating and paying royalties. The broad definition of Gross Sales means that almost all income streams related to the Bor Restoration business are subject to royalty fees. The franchisee is responsible for tracking all revenue sources and ensuring timely payments to avoid late fees or other penalties. The minimum royalty ensures that Bor Restoration receives a baseline income from each franchise, regardless of sales volume, which could be a factor for franchisees in smaller markets or during initial ramp-up periods.