How is the maximum allowable amount of retail installment contracts for Byrider calculated?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
| Name of Fee 1 | Amount | Due Date | Remarks |
|---|---|---|---|
| Ultra2 Royalty Fee | $5,500-$7,800 plus 1.65%-1.90% Gross Receipts | Monthly | Gross Sales (Byrider Vehicle Sales): (i) during first year of operation of the Business, $5,500 per month; (ii) during second year of operation of the Business, the greater of $6,700 or 1% of Gross Sales (Byrider Vehicle Sales); and (iii) after second year of operation of Business, the greater of $7,800 or 1% of Gross Sales (Byrider Vehicle Sales). See Note 2. |
| Gross Receipts (CNAC Collections): After the first year of operation of the Business, 1.90% of your Gross Receipts (CNAC) throughout the remaining term of the Franchise Agreement, except, if you're signing your third (or more) Franchise Agreement, you will pay 1.65% of your Gross Receipts (CNAC Collections), so long as you are in compliance with all Franchise Agreements with Byrider Franchising, Partners and you continue to operate at least two additional Byrider Businesses that are open to the public. If you fail to meet these conditions, you will pay 1.90% for the remaining term of your third (or more) Franchise Agreement. | |||
| Unaffiliated Assignment of Retail Installment Contracts. You may sell and assign retail installment contracts to unaffiliated third parties (each or collectively "Third Party"); provided, however: (i) you must obtain our approval of the Third Party; |
Source: Item 6 — Other Fees (FDD pages 21–32)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, a franchisee may sell and assign retail installment contracts to unaffiliated third parties. However, the contract values, in the aggregate, cannot exceed 20% of the franchisee's Gross Sales 12-month rolling monthly average. This means that Byrider franchisees are limited in the amount of retail installment contracts they can assign to third parties, based on their gross sales over the previous year.
This limitation has a direct impact on a franchisee's financial operations. Byrider requires franchisees to obtain approval for the third party they intend to sell or assign the contracts to. This approval process ensures that the third party meets Byrider's standards.
This restriction helps Byrider maintain control over its financing operations and manage risk. By limiting the volume of contracts that can be sold to third parties, Byrider ensures that franchisees primarily utilize CNAC (presumably an affiliated financing entity) for retail installment contracts, aligning the franchisee's interests with Byrider's overall financial strategy. Franchisees should carefully consider this restriction and its potential impact on their business model and revenue streams.