What is the dependency between the Craters & Freighters initial franchise fee and the population of the territory?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
| 1. | TERRITORY | |
|---|---|---|
| Pursuant to Section 1.2 of this Agreement, the Territory is defined as follows: | ||
| The population in the Territory as of the Effective Date of this Agreement is: | ||
| 2. | INITIAL FRANCHISE FEE | |
| Pursuant to Section 3.1 of this Agreement, the Initial Franchise Fee is: | ||
| 1,000,000 people. | Thirty-Five Thousand Dollars ($35,000) for a Territory with a population of fewer than | |
| Forty-Five Thousand Dollars ($45,000) for a Territory with a population |
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to Craters & Freighters' 2025 Franchise Disclosure Document, the initial franchise fee is directly related to the population of the territory granted to the franchisee. For a territory with a population of fewer than 1,000,000 people, the initial franchise fee is $35,000. However, for a territory with a population of 1,000,000 or more, the initial franchise fee is $45,000, with an additional supplemental territory fee.
The supplemental territory fee is calculated by multiplying the population in the territory by $0.015. This means that as the population of the territory increases beyond 1,000,000, the initial franchise fee also increases. For example, a territory with a population of 2,000,000 would have a supplemental territory fee of $30,000 (2,000,000 x $0.015), resulting in a total initial franchise fee of $75,000 ($45,000 + $30,000).
This structure means that franchisees in more densely populated areas will pay a higher initial franchise fee, likely reflecting the increased potential customer base and market opportunity. Prospective franchisees should carefully consider the population of their potential territory and the corresponding initial franchise fee, as this will impact their initial investment. It is important to note that the population figure used for this calculation is determined as of the effective date of the Franchise Agreement.