How is the Royalty Fee calculated for a Buns On Fire franchise?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
Recognizing the value of marketing and the importance of the standardization of promotions and public relations programs to the furtherance of the goodwill and public image of the System and the Marks, Franchisee agrees to contribute to a system-wide advertising and promotional Marketing Fund (the "Marketing Fund") during the term of this Agreement, and on a monthly basis payable at the same time and in the same manner as the Royalty Fee, an amount Franchisor determines that will not exceed one percent (1%) of Franchisee's Gross Revenue.
Source: Item 23 — RECEIPTS (FDD pages 49–200)
What This Means (2025 FDD)
Based on the 2025 Buns On Fire Franchise Disclosure Document, the Royalty Fee is paid monthly and at the same time and manner as contributions to the Marketing Fund. The FDD does not specify the exact percentage or calculation method for the Royalty Fee itself.
However, the document does state that franchisees must contribute to a system-wide advertising and promotional Marketing Fund. This contribution will not exceed one percent (1%) of the franchisee's Gross Revenue. This payment is made monthly, at the same time and in the same manner as the Royalty Fee.
Prospective franchisees should note that while the FDD specifies the maximum contribution to the Marketing Fund, it does not detail how the Royalty Fee is calculated. Franchisees should clarify the exact percentage and calculation method for the Royalty Fee with the franchisor to fully understand their ongoing financial obligations. Understanding the basis for calculating the royalty fee is crucial for projecting expenses and assessing the profitability of a Buns On Fire franchise.