For how many months is there no minimum royalty requirement for a Card My Yard franchise?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
will be unable to continue the operation of the Card My Yard business at the Location.
In order to maintain your territorial rights within the Protected Area, you must pay us monthly minimum royalties as described more fully in Item 6 above. There is no minimum royalty requirement applicable to the first seven months of your Franchise Agreement. If your royalty payments during any applicable month fall below the minimum royalty amount for that month, you must pay us the difference immediately upon our request, and we will be entitled, at our option, to deduct the difference from your designated account via ACH/EFT. In addition to our right to demand payment of these minimum royalties, we may reduce or eliminate your rights within the Protected Area, or terminate your Franchise Agreement, upon 30 days' written notice to you. You are not required to meet any other contingency to maintain your rights in the Protected Area, and we may not reduce your rights in the Protected Area due to population increases or other circumstances other than: (a) a zip code boundary change implemented by the U.S. Postal Service, (b) your failure to achieve the minimum royalty levels described in this paragraph, or (c) your breach of the Franchise Agreement or other agreement you have with us or our affiliates. We also reserve the right to reduce or eliminate your territorial rights within the Protected Area if you fail to achieve annual Gross Sales of at least $15,000. In order to maintain your territorial rights as described in Section II.B above, you must meet or exceed Gross Sales of $15,000 during each 12-month period throughout the term of this Agreement. However, during the period comprising your first 12 months of operation, your Gross Sales requirement shall instead comprise $5,000, with the period from your 13th month of operation through the completion of your 24th month of operation being accompanied by a Gross Sales requirement of $10,000. Thereafter, the standard Gross Sales requirement of $15,000 during each 12-month period shall apply. If you fail to achieve the minimum Gross Sales level during any applicable 12-month period, we may reduce or eliminate your territorial rights withi
Source: Item 12 — TERRITORY (FDD pages 43–46)
What This Means (2025 FDD)
According to Card My Yard's 2025 Franchise Disclosure Document, new franchisees are not required to pay minimum royalties for the first seven months of their Franchise Agreement. This initial period without minimum royalty obligations can be a significant benefit for new Card My Yard franchisees as they start their business.
This royalty grace period allows franchisees to focus on building their customer base and establishing their operations without the immediate pressure of meeting minimum royalty thresholds. It provides a financial buffer during the initial months when revenue may be lower as the business gains traction in its protected territory.
After this seven-month period, Card My Yard franchisees must meet the monthly minimum royalty requirements, and failure to do so can result in penalties. These penalties can include paying the difference between the actual royalty payments and the minimum required amount, a reduction or elimination of territorial rights, or even termination of the Franchise Agreement. Therefore, it is crucial for franchisees to understand and plan for these royalty obligations after the initial seven-month grace period.