Under what circumstances will a Byrider franchisee no longer qualify for the MLFR?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
ts 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. The Company acknowledges and agrees that the MLFR shall supersede Sections 1-3 of this Addendum so long as Franchisee (and its affiliates, if applicable): (i) continue to qualify for, and elect to pay, the MLFR; (ii) continue to operate at least two Byrider Businesses; and (iii) remain in compliance with the Franchise Agreement and all other agreements with the Company and its affiliates.
Source: Item 22 — Contracts (FDD pages 87–88)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, a franchisee's eligibility for the Multi-Location Flat Rate (MLFR) is contingent upon meeting specific ownership, operational, and compliance criteria. If a franchisee, or its affiliates, fails to maintain at least 51% common equity ownership and voting control among their Byrider businesses, they will no longer qualify for the MLFR. In such cases, the franchisee will revert to paying the Royalty Fee as originally outlined in Sections 1-3 of the addendum. This condition ensures that the franchisee maintains a significant stake and control over their multiple Byrider locations to benefit from the MLFR.
In addition to the ownership qualification, Byrider outlines further conditions for maintaining MLFR eligibility. Franchisees must continue to qualify for and elect to pay the MLFR, operate at least two Byrider businesses, and remain in compliance with the Franchise Agreement and all other agreements with Byrider and its affiliates. Failure to meet any of these conditions will result in the franchisee immediately being required to comply with the obligations under Sections 1-3 of the addendum, including the obligation to pay the standard Royalty Fee.
These requirements ensure that franchisees benefiting from the MLFR are actively engaged in operating multiple locations and adhering to Byrider's standards. The MLFR is designed to incentivize and reward franchisees who are committed to expanding their Byrider presence and maintaining compliance. By setting these conditions, Byrider aims to ensure that the MLFR is utilized by franchisees who are fully invested in the brand and its operational guidelines.