Does the Ultra2 Royalty Fee for Byrider franchises change after the first and second years of operation?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
ITEM 6
OTHER FEES
| 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. | |||
| Third Party Financed Sales Fee. You shall pay to us $250 per contract sold or assigned at time of vehicle sale from your dealer entity to Third Party ("Third Party Financed Sales Fee"). | |||
| Bulk Sale of Accounts Fee. You shall pay a fee equal to 1.9% of gross amounts of Byrider-originated consumer retail installment contracts sold to a third party ("Bulk Sale of Accounts Fee"). | |||
| See also |
Source: Item 6 — Other Fees (FDD pages 21–32)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, the Ultra2 Royalty Fee does indeed change after the first and second years of operation. During the first year, franchisees pay a flat rate of $5,500 per month. In the second year, the fee changes to the greater of $6,700 or 1% of Gross Sales (Byrider Vehicle Sales). After the second year, the Ultra2 Royalty Fee is the greater of $7,800 or 1% of Gross Sales (Byrider Vehicle Sales).
In addition to the Gross Sales (Byrider Vehicle Sales) component of the Ultra2 Royalty Fee, franchisees also pay a percentage of Gross Receipts (CNAC Collections). After the first year of operation, this fee is 1.90% of Gross Receipts (CNAC). However, if a franchisee is signing their third or more Franchise Agreement, and they are in compliance with all Franchise Agreements with Byrider Franchising Partners and continue to operate at least two additional Byrider Businesses that are open to the public, the fee is reduced to 1.65% of Gross Receipts (CNAC Collections).
It's important to note that the $7,800 minimum monthly payment associated with the Gross Sales (Byrider Vehicle Sales) component of the Ultra2 Royalty Fee will increase by 4.0% on January 1st of every other year. This means that the minimum payment will increase on January 1, 2026, and again on January 1, 2028, and so on, throughout the term of the Franchise Agreement. This escalating minimum should be factored into a franchisee's financial projections.