Under what circumstances can Card My Yard reduce a franchisee's rights in the Protected Area?
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, the franchisor can reduce or eliminate a franchisee's rights within their Protected Area under specific circumstances. These circumstances include failure to meet minimum royalty payments, breach of the Franchise Agreement or any other agreement with Card My Yard or its affiliates, and failure to achieve certain annual gross sales levels. Card My Yard will provide 30 days' written notice before reducing or eliminating these rights.
Specifically, to maintain territorial rights, a Card My Yard franchisee must pay monthly minimum royalties as detailed in Item 6 of the FDD. For the first seven months of the Franchise Agreement, there is no minimum royalty requirement. However, if royalty payments fall below the minimum for any applicable month, the franchisee must pay the difference immediately upon request, and Card My Yard can deduct this from the franchisee's account.
Additionally, Card My Yard reserves the right to reduce or eliminate territorial rights if a franchisee fails to achieve annual Gross Sales of at least $15,000. During the first 12 months of operation, the Gross Sales requirement is $5,000. From the 13th through the 24th month, the requirement is $10,000. After this initial period, the standard $15,000 annual Gross Sales requirement applies. These stipulations ensure that franchisees actively operate and promote their Card My Yard business within their Protected Area to maintain their exclusive rights.