Does Byrider allow franchisees to sell and assign retail installment contracts to unaffiliated third parties?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
ITEM 6
OTHER FEES
| Name of Fee 1 | Amount | Due Date | Remarks |
|---|---|---|---|
| Ultra2 Royalty Fee | $5,500-$7,800 plus 1.65%-1.90% Gross Receipts | Monthly | Gross Sales (Byrider Vehicle Sales): (i) during first year of operation of the Business, $5,500 per month; (ii) during second year of operation of the Business, the greater of $6,700 or 1% of Gross Sales (Byrider Vehicle Sales); and (iii) after second year of operation of Business, the greater of $7,800 or 1% of Gross Sales (Byrider Vehicle Sales). See Note 2. |
| Gross Receipts (CNAC Collections): After the first year of operation of the Business, 1.90% of your Gross Receipts (CNAC) throughout the remaining term of the Franchise Agreement, except, if you're signing your third (or more) Franchise Agreement, you will pay 1.65% of your Gross Receipts (CNAC Collections), so long as you are in compliance with all Franchise Agreements with Byrider Franchising, Partners and you continue to operate at least two additional Byrider Businesses that are open to the public. If you fail to meet these conditions, you will pay 1.90% for the remaining term of your third (or more) Franchise Agreement. | |||
| Unaffiliated Assignment of Retail Installment Contracts. You may sell and assign retail installment contracts to unaffiliated third parties (each or collectively "Third Party"); provided, however: (i) you must obtain our approval of the Third Party; and (ii) you may not sell or assign retail installment contracts with contract values, in the aggregate, of more than 20% of your Gross Sales 12-month rolling monthly average. | |||
| Third Party Financed Sales Fee. You shall pay to us $250 per contract sold or assigned at time of vehicle sale from your dealer entity to Third Party ("Third P |
Source: Item 6 — Other Fees (FDD pages 21–32)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, franchisees are permitted to sell and assign retail installment contracts to unaffiliated third parties, referred to as "Third Party." However, this is conditional. Byrider's approval of the specific Third Party is required, and this approval will not be unreasonably withheld.
Furthermore, there's a limit on the volume of contracts that can be sold or assigned. The aggregate contract values of these sales or assignments cannot exceed 20% of the franchisee's Gross Sales, calculated as a 12-month rolling monthly average. This restriction ensures that franchisees do not excessively rely on third-party financing to the detriment of Byrider's established financing system.
In addition to these conditions, Byrider franchisees must pay a "Third Party Financed Sales Fee" of $250 for each contract sold or assigned at the time of the vehicle sale from the franchisee's dealer entity to the Third Party. There is also a "Bulk Sale of Accounts Fee" of 1.9% of gross amounts of Byrider-originated consumer retail installment contracts sold to a third party. These fees are designed to compensate Byrider for the franchisee's use of external financing options.
These stipulations provide Byrider with a degree of control over franchisee financing activities, ensuring that the brand's reputation and financial interests are protected while still allowing franchisees some flexibility in managing their retail installment contracts.