What index is used to determine the potential increase in the Byrider royalty fee?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
any 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").
- B. Royalty Fee Increase. The Company and Franchisee acknowledge and agree that the Company reserves the right to increase the Royalty Fee set forth in Section 3.10 of the Franchise Agreement, as amended by this Addendum, 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.
- C. Representation of Ownership. 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.
- D. Traditional Royalty Fee.
Source: Item 22 — Contracts (FDD pages 87–88)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, the National Consumer Price Index for All Urban Consumers (CPI-U) – All Items (1982-1984 = 100) is the index used to determine potential increases to the royalty fee. 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.
This means that Byrider may adjust the royalty fees charged to franchisees based on changes in this specific CPI-U. The CPI-U tracks the average change over time in the prices paid by urban consumers for a basket of consumer goods and services. By tying royalty fee increases to this index, Byrider aims to adjust fees in line with general economic inflation.
Any increase to the royalty fee based on the CPI-U will be applied uniformly to all franchisees operating under the same franchise agreement. Byrider will provide written notification to franchisees on or before December 1st of each calendar year regarding any changes to the royalty fee that will take effect in the following calendar year. This advance notice allows franchisees to plan for any potential adjustments to their operating costs.
In addition to the royalty fee, Byrider also reserves the right to increase the Volume Surcharge and the Monthly Combined Royalty Cap by the same CPI-U index. This ensures that various aspects of the franchisee's financial obligations to Byrider can be adjusted to reflect changes in the overall cost of goods and services.