What is the Minimum Monthly Royalty Fee for a Craters & Freighters franchise in year 3 of operation?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
| Year of Operation | Minimum Performance Standard | Minimum Monthly Royalty Fee |
|---|---|---|
| 1 | $200,000 | $0 |
| 2 | $400,000 | $1,667 |
| 3 | $510,000 | $2,125 |
Source: Item 12 — TERRITORY (FDD pages 29–32)
What This Means (2025 FDD)
According to Craters & Freighters's 2025 Franchise Disclosure Document, the minimum monthly royalty fee for a franchise in its third year of operation is $2,125. This fee is part of a tiered system that also includes minimum performance standards, which Craters & Freighters requires franchisees to meet.
In the first year, there is no minimum monthly royalty fee, but the minimum performance standard is $200,000. This increases to a $1,667 minimum monthly royalty fee and a $400,000 minimum performance standard in the second year. By the third year, the minimum performance standard rises to $510,000, alongside the $2,125 royalty fee.
It's important to note that at the end of year three, Craters & Freighters will determine the minimum performance standards and minimum monthly royalty fees for years 4 through 15. These adjustments will be based on factors such as population, demographics, economic conditions, competition, market penetration, and the growth rate of other Craters & Freighters franchises. This means that the royalty fees could change significantly after the initial three-year period, impacting the franchisee's financial obligations and profitability.