What is the meaning of 'contract values, in the aggregate' when referring to retail installment contracts sold by a Byrider franchisee?
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; and (ii) you may not sell or assign retail installment contracts with contract values, in the aggregate, of more than 20% of your Gross Sales 12-month rolling monthly average. |
Source: Item 6 — Other Fees (FDD pages 21–32)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, 'contract values, in the aggregate' refers to the total value of all retail installment contracts that a franchisee sells and assigns to unaffiliated third parties. Byrider franchisees are permitted to sell and assign these contracts, but they must first obtain Byrider's approval of the third party.
However, there's a limit to how much of this selling can occur. The total value of these contracts cannot exceed 20% of the franchisee's Gross Sales (Byrider Vehicle Sales) based on a 12-month rolling monthly average. This means Byrider calculates the franchisee's gross sales each month, averages it over the previous 12 months, and then limits the sale of contracts to 20% of that average.
This restriction is in place to ensure that Byrider franchisees primarily focus on sales that benefit the Byrider system, rather than relying too heavily on third-party financing. It also protects Byrider's interests by ensuring that a significant portion of the franchisee's business remains within the Byrider network. If a franchisee exceeds this 20% limit, they would be in violation of the franchise agreement.
In addition to this limit, Byrider also charges a Third Party Financed Sales Fee of $250 per contract sold or assigned at the time of the vehicle sale. This fee further incentivizes franchisees to prioritize sales within the Byrider system and generates additional revenue for Byrider from any third-party financing activities.