When is the fee for hiring a Byrider Franchising Partners' employee due?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
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| Name of Fee 1 | Amount | Due Date | Remarks |
|---|---|---|---|
| Compliance Audit | $500 – first failure $2,500 – second failure $10,000 – third failure | As incurred | If you fail a compliance audit (meaning a score of less than 80%) conducted by Byrider Franchising Partners, you must pay Byrider Franchising Partners $500 plus travel, food and lodging expenses for second audit. If you fail your second audit, you must pay Byrider Franchising Partners $2,500 plus travel, food and lodging expenses for third audit. If you fail third audit, you must pay Byrider Franchising Partners $10,000 and Byrider Franchising Partners may terminate the Franchise Agreement. |
Source: Item 6 — Other Fees (FDD pages 21–32)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, a franchisee must pay a fee if they hire a Byrider Franchising Partners employee during the term of the Franchise Agreement, or within one year after the agreement's termination or expiration. This fee is equivalent to three times the annual compensation of the hired employee.
The fee is due on the date the franchisee hires the Byrider Franchising Partners' employee. This significant fee is designed to protect Byrider from losing valuable personnel to its franchisees, ensuring that franchisees do not directly benefit from Byrider's investment in its employees without compensating the company.
This policy has substantial implications for prospective franchisees. It restricts their ability to recruit directly from Byrider's existing workforce or recent former employees. The high cost associated with hiring such individuals—three times their annual compensation—could deter franchisees from making such hires, even if they believe the individual would significantly benefit their business. This fee is considerably higher than typical recruitment or training reimbursement fees seen in some franchise systems, highlighting the importance Byrider places on retaining its employees and preventing franchisees from poaching its talent.