What is the definition of 'Gross Sales' used in the context of the Ultra2 Royalty Fee for Byrider franchises?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
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The term "Gross Sales (Byrider Vehicle Sales)" means the full purchase price of all vehicles sold at retail (whether financed or sold for cash), including charges for vehicle service contracts, documentary fees, and all other fees or charges which accompany the sale, minus overallowances given on trade-in vehicles. For example, the customer's purchase price of the vehicle is $10,000 and the customer has a trade in with an actual cash value of $1,000 and assuming no vehicle service contract or other charges. However, the Franchisee offers $1,500 for the trade in. The "overallowance" is the amount offered of $1,500 less the actual cash value of $1,000 equaling $500. Therefore, "Gross Sales (Byrider Vehicle Sales)" in this example is the full purchase price of $10,000 less the overallowance of $500 which equals $9,500. Not included in "Gross Sales (Byrider Vehicle Sales)" are receipts from "wholesaled vehicles." Wholesaled Vehicles are defined as vehicles sold for resale and for which
Source: Item 6 — Other Fees (FDD pages 21–32)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, "Gross Sales (Byrider Vehicle Sales)" is defined as the full retail purchase price of all vehicles sold, whether financed or sold for cash. This includes charges for vehicle service contracts, documentary fees, and all other fees or charges that accompany the sale. However, this definition excludes overallowances given on trade-in vehicles. For example, if a customer purchases a vehicle for $10,000 and trades in a vehicle with an actual cash value of $1,000, but Byrider offers $1,500 for the trade-in, the overallowance is $500 ($1,500 - $1,000). In this case, "Gross Sales (Byrider Vehicle Sales)" would be $9,500 ($10,000 - $500).
This definition is important for Byrider franchisees because the Ultra2 Royalty Fee is calculated based on Gross Sales (Byrider Vehicle Sales). Understanding exactly what constitutes gross sales ensures accurate royalty fee calculations. The FDD also specifies that receipts from "wholesaled vehicles" are not included in Gross Sales (Byrider Vehicle Sales). Wholesaled vehicles are defined as vehicles sold for resale and for which no sales tax is required.
For Ultra Franchisees (those who joined the Byrider system after January 1, 2021), the Ultra2 Royalty Fee has a minimum monthly payment component tied to Gross Sales (Byrider Vehicle Sales). The document states that this minimum payment will increase by 4.0% on January 1st of every other year, starting January 1, 2026. This escalating minimum payment means franchisees need to anticipate higher royalty payments as their franchise matures.