What happens to the Byrider MLFR if the franchisee no longer meets the Ownership Qualification?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee represents and warrants, on its behalf and on behalf of its affiliates, that it and they have at least 51% in common equity ownership and voting control among the Byrider Businesses that it and they own (the "Ownership Qualification").
If Franchisee, or its affiliates, no longer meet the Ownership Qualification, then Franchisee will no longer qualify for, and pay, the MLFR and will instead pay the Royalty Fee as originally provided under Sections 1-3 in this Addendum.
Source: Item 22 — Contracts (FDD pages 87–88)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, if a franchisee or its affiliates no longer meet the Ownership Qualification, the franchisee will no longer qualify for, and pay, the MLFR (Modified Legacy Royalty Fee). Instead, they will be required to pay the Royalty Fee as originally provided under Sections 1-3 in the addendum to the franchise agreement.
The Ownership Qualification is defined as the franchisee and its affiliates having at least 51% in common equity ownership and voting control among the Byrider Businesses that they own. This condition is crucial for franchisees seeking to benefit from the MLFR structure.
This change in royalty fee structure could significantly impact the franchisee's financial obligations to Byrider. Franchisees should carefully consider the implications of failing to maintain the Ownership Qualification and how it could affect their profitability and overall business strategy. It is important to understand the specific Royalty Fee outlined in Sections 1-3 of the addendum to accurately assess the potential financial impact.