How is the annual gross revenue equivalent calculated for Bumble Roofing's minimum royalty?
Bumble_Roofing Franchise · 2025 FDDAnswer from 2025 FDD Document
- (i) The Monthly Gross Revenue Equivalent was calculated by dividing the Minimum Royalty by 6.5%.
This represents the amount that you would need to generate in order for 6.5% of Gross Revenue to equal the Minimum Royalty.
(ii) The Annual Gross Revenue Equivalent was calculated by multiplying the Monthly Gross Revenue Equivalent by 12.
As used in this chart, the term "Gross Revenues" means amounts derived from all products or services sold from or through your Franchise (across all Territories), including any sale of products or services made for cash or credit, or partly for cash and partly for credit, less refunds. "Gross Revenues" also includes the fair market value of any services or products received by you in barter or in exchange for services and products.
Gross Revenues are deemed received by the franchisee at the time the services or products are delivered or at the time the sale takes place, whatever occurs first, regardless if final payment has actually been received by the franchisee.
There is no rollover credit for weeks in which the royalty amount exceeds the minimum.
Source: Item 6 — OTHER FEES (FDD pages 19–24)
What This Means (2025 FDD)
According to Bumble Roofing's 2025 Franchise Disclosure Document, the annual gross revenue equivalent is calculated by first determining the monthly gross revenue equivalent and then multiplying that figure by 12. The monthly gross revenue equivalent is calculated by dividing the minimum royalty by 6.5%. This calculation provides a revenue benchmark; it represents the amount a franchisee would need to generate for 6.5% of their gross revenue to equal the minimum royalty.
For example, during months 7-12 after opening, the minimum royalty is $1,000. The monthly gross revenue equivalent is $15,385, and the annual gross revenue equivalent is $184,615. By months 37 and beyond, the minimum royalty increases to $2,000, resulting in a monthly gross revenue equivalent of $30,769 and an annual gross revenue equivalent of $369,230. These figures are provided for convenience and are not minimum sales requirements.
It's important to note that "Gross Revenues" for Bumble Roofing include all income from products and services sold through the franchise, whether for cash, credit, or barter, less refunds. Revenue is considered received when the services or products are delivered or when the sale takes place, regardless of when final payment is received. This means franchisees are responsible for royalty payments on sales even if they haven't yet collected the money from customers. There is also no rollover credit for weeks in which the royalty amount exceeds the minimum.