What is the Minimum Royalty Fee amount that a Cr3 American Exteriors franchisee must pay?
Cr3_American_Exteriors Franchise · 2025 FDDAnswer from 2025 FDD Document
| TYPE OF FEE | AMOUNT | DUE DATE (Note 2) | REMARKS |
|---|---|---|---|
| (Note 1) | |||
| Royalty Fee | The greater of (i) 6.0% of monthly Gross Revenue collected (the “Royalty Fee”) or (ii) $2,000.00 (the “Minimum Royalty Fee”). (Note 3) | By the 10th day of the month. | Royalty Fee’s start the first month in operation; however, the Minimum Monthly Royalty Fee, if applicable, will not begin until the 7th month of operation. Payments are due on |
Source: Item 6 — OTHER FEES (FDD pages 18–20)
What This Means (2025 FDD)
According to Cr3 American Exteriors's 2025 Franchise Disclosure Document, a franchisee must pay a royalty fee which is the greater of 6.0% of monthly Gross Revenue collected or a minimum royalty fee of $2,000.00. This minimum royalty fee does not begin until the 7th month of operation. Gross Revenue includes all revenues derived directly or indirectly from the Franchised Business, excluding sales and use taxes.
This means that even if a Cr3 American Exteriors franchise location has low sales volume, the franchisee is still obligated to pay a minimum of $2,000 as a royalty fee starting in the seventh month of operation. This could impact the franchisee's profitability, especially during the initial months when the business is still growing and may not be generating substantial revenue.
Franchisees should carefully consider their projected revenue and expenses to ensure they can meet this minimum royalty obligation. It is important to note that the royalty fee is calculated on gross revenue, not net profit, so even a business operating at a loss could still owe the minimum royalty fee. The franchisee is required to sign bank documents to allow Cr3 American Exteriors to debit the franchisee's bank account via ACH Electronic Transfer for all fees and payments due.