Besides the initial franchise fee, what other fees must a Byrider franchisee pay to the company?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
ections). The term "Gross Receipts (CNAC Collections)" shall mean all monies received, such as payments from customer accounts, deferred down payments, payments from bulk sale of customer accounts, and including all other amounts received, except cash down payments received prior to delivery of the vehicle.
- 3.8 Initial Franchise Fee. The term "Initial Franchise Fee" shall mean Sixty Thousand ($60,000) Dollars. For each additional franchise, Franchisee shall pay the then current fee. See Exhibit B for Franchisee's additional franchise category designation ("Additional Franchise Category")
- 3.9 Service Center. The term "Service Center" shall mean the service center located at the Business to service vehicles sold by Businesses in accordance with the Company's standards and specifications.
- 3.10 Royalty Fee. The Royalty Fee commencement date is the earlier of the date the Franchisee's Business is open to the public or the one-year anniversary of the date of this Agreement. The term "Royalty Fee" shall mean that amount calculated monthly as follows:
Gross Sales (Byrider Vehicle Sales):
- A. During the first year of operation of Franchisee's Business: $5,500 per month;
- B. During the second year of operation of Franchisee's Business: the greater of $6,700 per month or 1% of the Franchisee's Gross Sales (Byrider Vehicle Sales) for that month; and
- C. After the second year of operation of Franchisee's Business: the greater of $7,800 per month or 1% of the Franchisee's Gross Sales (Byrider Vehicle Sales) for that month.
The foregoing $7,800 minimum monthly payment provided in subsection (B) above will increase by 4.0% on January 1st of every other year (for example, it will increase by 4.0% on January 1, 2026 and increase by another 4.0% on January 1, 2028, etc.) throughout the Term (as defined in Section 5.1 below).
plus,
Gross Receipts (CNAC Collections):
After the first year of operation of Franchisee's Business, 1.90% of Franchisee's Gross Receipts (CNAC Collections) throughout the remaining Term of this Agreement; provided, however, if this is Franchisee's third (or subsequent) Franchise Agreement that it has entered into with the Company, then Franchisee
shall pay 1.65% of Franchisee's Gross Receipts (CNAC Collections) throughout the remaining Term of this Agreement, so long as (i) Franchisee is in compliance with all other Franchise Agreements with the Company; and (ii) Franchisee continues to operate at least two (2) additional Businesses under separate Franchise Agreements with the Company that are open to the public. In the event Franchisee fails to meet any of the foregoing conditions, Franchisee shall pay 1.90% of Franchisee's Gross Receipts (CNAC Collections) for the remaining Term of this Agreement.
plus,
Unaffiliated Assignment of Retail Installment Contracts. Franchisee may sell and assign retail installment contracts to unaffiliated third parties (each or collectively "Third Party"); provided, however: (i) Franchisee must obtain Company's approval of the Third Party, which Company shall not unreasonably withhold; and (ii) Franchisee may not sell or assign retail installment contracts with contract values, in the aggregate, of more than 20% of Franchisee's Gross Sales 12-month rolling monthly average.
Third Party Financed Sales Fee. Franchisee shall pay to Company $250 per contract sold or assigned at time of vehicle sale from Franchisee's dealer entity to Third Party ("Third Party Financed Sales Fee").
Bulk Sale of Accounts Fee. Franchisee shall pay to Company a fee equal to 1.90% of gross amounts of Byrider-originated consumer retail installment contracts sold to a third party ("Bulk Sale of Accounts Fee").
See Exhibit B for Franchisee's royalty category designation ("Royalty Category").
3.11 Transfer Fee. The term "Transfer Fee" shall mean Five Thousand ($5,000)
Dollars.
ARTICLE IV
GRANT OF BYRIDER FRANCHISE
4.1 Grant of Franchise and License. Subject to the terms and conditions herein, the Company hereby grants to the Franchisee, and the Franchisee hereby accepts from the Company, (A) a non-exclusive franchise to open and operate one Business and (B) a non-exclusive license to use the System and the Marks solely in connection with the operation of the Franchisee's Business. Termination or expiration of this Agreement shall constitute a termination of the foregoing franchise and license. The Company will not operate or grant a franchise for the operation of another Business, the physical premises of which is located within the protected territory described on Exhibit A hereof (the "Protected Territory"); provided that the Company may operate and grant franchises for the operation of Businesses in the Protected Territory if the Company delivers a notice of default under this Agreement and Franchisee does not cure the default within the applicable cure period, if any.
- 4.2 Retention of Rights. Except as explicitly and specifically granted to the Franchisee herein, all rights in and to the Marks, the System, and the Business and the goodwill associated with each of them is hereby reserved to the Company. Franchisee is not granted any rights by implication, innuendo, extension or extrapolation. Specifically, but without limitation, the Company retains the right, but shall not be obligated, to:
- A. Add new programs, products and/or services to the Business at any time;
- B. Establish, operate and franchise a business offering and selling products and/or services which may be the same as or similar to the products and services offered by the Business under any trade names, trademarks, service marks or logos other than the Marks;
- C. Use or license the use of the Marks in business other than the Business;
- D. Acquire the assets or ownership interests of one or more businesses providing products and services similar to those provided at the Business Locations, and franchising, licensing or creating similar arrangements with respect to these businesses once acquired, wherever these businesses (or the franchisees or licensees of these businesses) are located or operating;
- E. Be acquired (whether through acquisition of assets, ownership interests or otherwise, regardless of the form of transaction), by a business providing products and services similar to those provided at the Business Locations, or by another business; and
- F. Engage in all other activities not expressly prohibited by this Agreement.
Nothing in this Agreement limits the Company's rights to sell, distribute and/or to provide products and services of any kind, under the Marks or otherwise, anywhere except at the Business Location.
- 4.3 Relocation. The Franchisee's Business is granted for a specific location, or a location to be approved by the Company.
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, in addition to the initial franchise fee of $60,000, franchisees must pay several other fees. These include ongoing royalty fees, which are calculated monthly based on Gross Sales from Byrider vehicle sales and Gross Receipts from CNAC collections. The royalty fee for Byrider vehicle sales starts at $5,500 per month during the first year, increasing to the greater of $6,700 per month or 1% of Gross Sales in the second year, and then to the greater of $7,800 per month or 1% of Gross Sales after the second year. The $7,800 minimum increases by 4% every other year. Additionally, franchisees pay 1.90% of Gross Receipts from CNAC collections after the first year, though this may be reduced to 1.65% if the franchisee operates multiple Byrider locations and meets certain compliance conditions.
Byrider franchisees also face other potential fees. A Technology System Fee is required to cover the costs of the Byrider technology system, with the specific amount and payment schedule determined by the vendor. Franchisees also pay a Reputation Management Fee for reputation management texts performed by Byrider. If a franchisee sells or assigns retail installment contracts to unaffiliated third parties, they must pay Byrider a Third Party Financed Sales Fee of $250 per contract. Furthermore, a Bulk Sale of Accounts Fee is levied at 1.90% of the gross amounts of Byrider-originated consumer retail installment contracts sold to a third party.
Finally, Byrider charges a Transfer Fee of $5,000 for franchise transfers. For franchisees who sign an Area Development Agreement and are unable to meet the development schedule, Byrider may grant a six-month extension for a Development Schedule Extension Fee of $5,000. These various fees represent significant ongoing financial obligations for Byrider franchisees and should be carefully considered when evaluating the franchise opportunity.