What is the minimum monthly Royalty Fee for a Boulder Designs franchise in Year 2?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
| Name of Fee | Amount1 | Due Date | Remarks | |---------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------|---------| | Royalty Fee2,4 | The greater of: (i) The percentage of Collected Gross Revenue in accordance with the following schedule: 7% of Gross Revenue Or (ii) The minimum monthly Royalty Fee in accordance with the following schedule: Year 1 - $750/month Year 2 - $950/ month Year 3 thru remainder of term $1,500/month | First day of each month | | Note 4. "Gross Revenues" means the aggregate of all income and monthly fees Franchisee receives from customers for the purchase or provision of any goods or services, including enrollment fees, or any other person or business entity for the Franchised Business in connection with the Franchised Business (whether or not in accordance with the terms of the Franchise Agreement) and whether for check, cash, credit or otherwise, from the sale of products and services (including service charges in lieu of gratuity) regardless of the dollar amount Franchisee sells each product or service for, including, without limitation, all proceeds from any business interruption insurance and any revenue generated from National Accounts, but excluding (a) all insurance payments, check, cash, credit or debit card refunds made in good faith provided, prior to granting the refunds, the revenue related to the refunds was included in Gross Revenues, (b) any sales and equivalent taxes that Franchisee collects for or on behalf of and pay to any governmental taxing authority, and (c) any rebate Franchisee receives from a manufacturer or supplier. Note 1. The fees are uniformly imposed and nonrefundable unless noted otherwise below or in the Remarks column. Royalty Fees, Audit Expenses, Transfer Fees, plus any other amounts you owe us will be deducted from payments that your customers submit to you under the Order Processing System, or as a separate ACH withdrawal if warranted.
Source: Item 6 — OTHER FEES (FDD pages 11–16)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, franchisees must pay a royalty fee, which is the greater of a percentage of gross revenue or a minimum monthly fee. In the second year of operation, the minimum monthly royalty fee is $950. In year 1, the minimum monthly royalty fee is $750, and in year 3 through the remainder of the term, the minimum monthly royalty fee is $1,500.
In addition to the minimum monthly royalty fee, Boulder Designs franchisees must also pay 7% of gross revenue. Gross Revenues include all income received from customers for goods and services, including enrollment fees, from any person or business entity. Gross Revenues also include proceeds from business interruption insurance and revenue generated from National Accounts. Gross Revenues exclude insurance payments, refunds, sales taxes, and manufacturer rebates.
The royalty fee is due on the first day of each month. These fees, along with audit and transfer fees, can be deducted from payments customers submit through the Order Processing System or as a separate ACH withdrawal. Understanding how these fees are calculated and when they are due is crucial for managing the financial obligations of a Boulder Designs franchise.