exception

Are there any exceptions to the standard fee structure for a Card My Yard franchise?

Card_My_Yard Franchise · 2025 FDD

Answer from 2025 FDD Document

NOTE: Renewing franchisees will be subject to the 5 th year minimum royalty requirements throughout the term of any renewal franchise agreement.

NOTE: All Transferrees acquiring an existing Card My Yard business from a franchisee must sign our then-current Franchise Agreement within thirty days of approval of the transfer by us, and payment of applicable transfer. If you seek to transfer or resell your business, failure to follow this process will incur the then-current termination fees and result in termination of your franchise.

Local Marketing and Cooperatives

You must complete at least 24 promotional yard greeting services (worth a total of approximately $2,400) during each 12 -month period under your agreement, and you must also spend at least the following amounts on local advertising: (a) $300 in the first 12 months of your agreement, (ii) $500 in months 13 through 24 of your agreement, and (iii) $800 in each 12 month period thereafter. No advertising cooperatives have been established as of the date of this disclosure document, but if established by us for your market, you will be required to contribute to such Cooperative.

On demand These fees are typically paid directly to the local marketing service providers, but if you fail to spend the required minimum amount on local marketing (or fail to complete the minimum number of promotional yard greetings services) then we may require you to pay the corresponding amounts to us so that we may purchase local marketing services for your Protected Area. Expenses considered to be local marketing include, but are not limited to, promotional yard set -ups, local coupons, Internet/social media ads, sponsorships, and/or PTA/PTO events. We may increase the minimum local advertising requirements upon 30 days' written notice to you. In addition to local spending requirements, you must post at least 5 promotional messages on both Facebook and Instagram each week.

We have not done so yet, but we have the right to designate any geographic area in which two or more company owned or franchised Card My Yard businesses are located as a region for purposes of establishing an advertising cooperative ("Cooperative"). Any Cooperative may be terminated by us, in our sole discretion, upon written notice to you. If we establish a Cooperative that includes your Card My Yard business, you will be required to contribute an amount set forth in the Cooperative's governing documents. Amounts you contribute to a Cooperative will not be applied to satisfy any portion of your individual local advertising requirements. If we have company -owned Card My Yard

| Audit Fee | Cost of audit | When billed | Payable if an examination or audit shows you have understated any amount owed to us by 2% or more. | | Interest and Late Fees | Interest of 18% per annum or the maximum rate allowed by applicable law, or, at our option, $100 for each failure to timely pay an amount owed under the Franchise Agreement | On demand | We may charge interest or a late fee for any delinquent amounts due under the Franchise Agreement. |

Source: Item 6 — OTHER FEES (FDD pages 15–23)

What This Means (2025 FDD)

According to Card My Yard's 2025 Franchise Disclosure Document, there are a few instances that modify the standard fee structure.

Firstly, renewing franchisees are subject to the 5th-year minimum royalty requirements throughout the term of any renewal franchise agreement. This means that even if their gross sales would normally qualify them for a lower royalty in earlier years, they will pay at least the 5th-year minimum. Secondly, all transferees acquiring an existing Card My Yard business from a franchisee must sign the then-current Franchise Agreement within thirty days of approval of the transfer by Card My Yard and payment of applicable transfer. Failure to follow this process will incur the then-current termination fees and result in termination of the franchise.

Another exception involves local marketing. Franchisees must complete at least 24 promotional yard greeting services (worth approximately $2,400 total) each year and spend specific minimum amounts on local advertising: $300 in the first year, $500 in the second, and $800 annually thereafter. If a franchisee fails to meet these local marketing requirements, Card My Yard may require them to pay the corresponding amounts to Card My Yard, so that Card My Yard may purchase local marketing services for the Protected Area. Furthermore, if Card My Yard establishes an advertising cooperative in a region with multiple Card My Yard businesses, franchisees will be required to contribute to it; these contributions do not count toward the individual local advertising requirements.

Finally, the standard fee structure can be modified if an audit reveals understated amounts owed to Card My Yard by 2% or more, in which case the franchisee pays the cost of the audit. Franchisees may also incur interest and late fees of 18% per annum or $100 for each failure to timely pay an amount owed under the Franchise Agreement. These exceptions highlight the importance of adhering to the franchise agreement and maintaining accurate financial reporting.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.