What is the minimum CPI increase required for Chop5 Salad Kitchen to adjust fees?
Chop5_Salad_Kitchen Franchise · 2024 FDDAnswer from 2024 FDD Document
We reserve the right to periodically adjust all fees expressed as a fixed dollar amount based on changes to the Consumer Price Index (CPI) in the United States.
We may review these fees every every two (2) years and increase the fees based on CPI changes, but only if the then-current CPI ("Current CPI") is more than 5% higher than the corresponding CPI in effect on: (a) the Effective Date of this Agreement (for the initial fee adjustments); or (b) the date we implemented the last fee adjustment (for subsequent fee adjustments) ("Baseline CPI").
The adjusted fee shall be calculated by multiplying the current fee by a fraction: (a) the numerator of which is an amount calculated as the product of (i) 100 and (ii) the difference of Current CPI minus Baseline CPI; and (b) the denominator of which is Baseline CPI.
We may utilize any CPI index series published by the U.S.
Department of Labor or any comparable Governmental Authority that we deem appropriate.
We currently use the following index: All Urban Wage Earners and Clerical Workers (CPI-W), U.S.
Source: Item 23 — RECEIPT (FDD pages 50–178)
What This Means (2024 FDD)
According to Chop5 Salad Kitchen's 2024 Franchise Disclosure Document, the company reserves the right to adjust fixed dollar amount fees periodically based on changes to the Consumer Price Index (CPI) in the United States. Chop5 Salad Kitchen may review these fees every two years and increase them based on CPI changes.
However, an increase will only occur if the current CPI is more than 5% higher than the baseline CPI. The baseline CPI is defined as the CPI in effect on either the effective date of the franchise agreement for initial fee adjustments, or the date of the last fee adjustment for subsequent adjustments.
The adjusted fee is calculated by multiplying the current fee by a fraction. The numerator of this fraction is 100 multiplied by the difference between the current CPI and the baseline CPI. The denominator is the baseline CPI. This ensures that fees are only adjusted to reflect significant increases in the cost of living, protecting franchisees from minor fluctuations. Chop5 Salad Kitchen uses the All Urban Wage Earners and Clerical Workers (CPI-W), U.S. City Average (1982-84 = 100), "All Items" index but may use any CPI index series published by the U.S. Department of Labor or any comparable Governmental Authority.