What is the Minimum Performance Standard for a Craters & Freighters franchise in year 2 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, a franchisee must meet a minimum performance standard (MPS) based on the year of operation. For the second year, the minimum performance standard is $400,000. In addition to the minimum performance standard, the franchisee is also required to pay a minimum monthly royalty fee of $1,667 during the second year of operation.
These minimum performance standards are important for franchisees to understand, as failure to meet them could result in the reduction or modification of their territory. However, the FDD states that these standards should not be considered financial performance representations for the franchised business. This means that Craters & Freighters is not guaranteeing that a franchisee will achieve this level of revenue, but rather setting a minimum expectation for performance.
Prospective franchisees should carefully consider these minimum performance standards and assess their ability to meet them based on their market research and business plan. It is also important to understand how Craters & Freighters determines and adjusts these standards in later years of the franchise agreement, as the standards for years 4-15 are determined at the end of year 3 and are subject to change based on various factors.