What is the Minimum Royalty Fee for a Cr3 American Exteriors franchise?
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, franchisees must pay a royalty fee, which is the greater of 6.0% of monthly Gross Revenue collected or a minimum 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 in a particular month, after the first six months, the franchisee must still pay a minimum royalty of $2,000. The royalty fee is due by the 10th day of each month. Franchisees should factor this minimum payment into their financial projections to ensure they have sufficient cash flow, especially during the early stages of operation when building a customer base.
It is common for franchises to have either a percentage-based royalty or a minimum royalty, whichever is greater. This structure ensures that the franchisor receives a consistent income stream, even if a franchisee's sales fluctuate. The 6% royalty fee is fairly standard in the franchise industry. The FDD specifies that all royalties on transactions will be paid at the time of deal closing through escrow attorney. Cr3 American Exteriors requires franchisees to sign bank documents to permit the company to debit the franchisee's bank account via ACH Electronic Transfer for all fees and payments due.