What is the minimum Royalty Fee for Cr3 American Exteriors, as detailed in Item 6?
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 |
What This Means (2025 FDD)
According to Cr3 American Exteriors' 2025 Franchise Disclosure Document, franchisees must pay a monthly royalty fee. This fee is calculated as the greater of 6.0% of the monthly Gross Revenues or a minimum of $2,000.00 per month, referred to as the "Minimum Monthly Royalty Fee".
The Royalty Fee payments begin in the franchisee's first month of operation. However, the Minimum Monthly Royalty Fee of $2,000.00 only applies starting from the seventh month after the franchisee begins operations. This means that for the first six months, the franchisee pays either 6.0% of their gross revenues if that exceeds $2,000, but after that, they will always pay at least $2,000 per month.
This structure is fairly common in franchising, as it allows new franchisees some time to build their revenue before being subject to a minimum royalty payment. Prospective Cr3 American Exteriors franchisees should carefully consider their projected revenues for the first year to understand how the royalty fee structure will impact their cash flow. It is important to note that the royalty fee is ongoing for the term of the agreement.