What is the meaning of 'Gross Receipts (CNAC)' when calculating the Ultra2 Royalty Fee for a Byrider franchise?

According to Byrider's 2025 Franchise Disclosure Document, "Gross Receipts (CNAC Collections)" is a component used to calculate the Ultra2 Royalty Fee. This term encompasses all monies received by the franchisee, including payments from customer accounts, deferred down payments, and payments from the bulk sale of customer accounts. The only exception to this definition is cash down payments received prior to the delivery of the vehicle.

For Ultra Franchisees (those who joined the Byrider system after January 1, 2021), the Ultra2 Royalty Fee is calculated based on both Gross Sales (Byrider Vehicle Sales) and Gross Receipts (CNAC Collections). After the first year of operation, the franchisee pays 1.90% of their Gross Receipts (CNAC Collections) for the remaining term of the Franchise Agreement. However, if a franchisee is signing their third or more Franchise Agreement and remains in compliance with all Franchise Agreements while operating at least two additional Byrider businesses open to the public, they will pay a reduced rate of 1.65% of Gross Receipts (CNAC Collections).

Understanding the components of the Ultra2 Royalty Fee, including the definition of Gross Receipts (CNAC Collections), is crucial for prospective Byrider franchisees. It allows them to accurately project their royalty obligations and assess the financial viability of the franchise. Franchisees should carefully consider these factors and seek clarification from Byrider regarding any uncertainties before entering into a franchise agreement.