By what index can Byrider increase the Volume Surcharge and Monthly Combined Royalty Cap?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company and Franchisee acknowledge and agree that the Company reserves the right to increase the Volume Surcharge set forth in Section 3.10 of the Franchise Agreement, as amended by this Addendum, and the Monthly Combined Royalty Cap by the National Consumer Price Index for All Urban Consumers (CPI-U) – All Items (1982-1984 = 100) for the most recent 12-month period from October through September as published by the U.S. Department of Labor, or a successor index. Any increase will be uniformly applied to all franchisees under the same form of franchise agreement. The Company will notify Franchisee in writing on or before December 1st of each calendar year as to any changes in the amounts for the following calendar year.
Source: Item 22 — Contracts (FDD pages 87–88)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, Byrider can increase the Volume Surcharge and the Monthly Combined Royalty Cap based on the National Consumer Price Index for All Urban Consumers (CPI-U) – All Items (1982-1984 = 100). This index reflects the most recent 12-month period from October through September, as published by the U.S. Department of Labor, or a successor index.
Any such increase will be applied uniformly to all franchisees operating under the same form of franchise agreement. Byrider will provide written notification to franchisees on or before December 1st of each calendar year regarding any changes to these amounts for the following calendar year. This means that franchisees will have advance notice of any adjustments to the Volume Surcharge and Monthly Combined Royalty Cap, allowing them to plan accordingly.
For a prospective franchisee, this indicates that the Volume Surcharge of $112 for every vehicle sold at retail in excess of 75 vehicles per Business Location per calendar month, and the Monthly Combined Royalty Cap, such as the $8,954 per month for Founder Franchisees, are not fixed. These figures can increase based on the CPI-U, potentially impacting the franchisee's profitability and overall costs. Franchisees should monitor the CPI-U and Byrider's annual notifications to understand potential future financial obligations.