What is the minimum monthly royalty fee for Craters & Freighters in year 5?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
At the end of year 3, we will determine the Minimum Performance Standards and Minimum Monthly Royalty Fees for years 4-15 of the Franchise Agreement and you will be provided with an amendment to your Franchise Agreement. We will base our decision on population, demographic factors, economic factors, competition, market penetration, the growth rate of other Craters & Freighters Franchised Businesses, and other relevant factors. If you are entering into a Successor Franchise Agreement, we will determine the Minimum Performance Standards and Minimum Monthly Royalty for your successor term.
Your failure or refusal to satisfy your Minimum Performance Standards may result in the reduction or modification of your Territory. These Minimum Performance Standards are not, and should not be considered, financial performance representations for your Franchised Business.
Source: Item 12 — TERRITORY (FDD pages 29–32)
What This Means (2025 FDD)
According to Craters & Freighters' 2025 Franchise Disclosure Document, the minimum monthly royalty fee for year 5 is not explicitly stated. The FDD indicates that Craters & Freighters will determine the Minimum Performance Standards and Minimum Monthly Royalty Fees for years 4-15 at the end of year 3. This determination will be formalized through an amendment to the Franchise Agreement, taking into account factors such as population, demographics, economic conditions, competition, market penetration, and the growth rate of other Craters & Freighters franchises.
For years 1-3, the FDD provides a table outlining the Minimum Performance Standards and Minimum Monthly Royalty Fees. In year 1, the Minimum Performance Standard is $200,000, with no minimum monthly royalty fee. Year 2 sees the Minimum Performance Standard increase to $400,000, with a minimum monthly royalty fee of $1,667. By year 3, the Minimum Performance Standard is $510,000, and the minimum monthly royalty fee is $2,125.
Prospective franchisees should note that the minimum performance standards are not financial performance representations. The actual royalty fees for years 4-15 are subject to change based on the factors mentioned and will be provided in an amendment to the franchise agreement after year 3. It is important for potential franchisees to discuss with Craters & Freighters the specific criteria used to determine these fees and to understand how these fees might impact their business's profitability.