What is the Minimum Performance Standard 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, a franchisee must generate a minimum annual revenue of $510,000 during their third year of operation to meet the Minimum Performance Standard. Additionally, the franchisee is obligated to pay a minimum monthly royalty fee of $2,125 during this period. These standards are applicable to all Craters & Freighters franchisees.
It is important to note that failure to meet the Minimum Performance Standards could lead to a reduction or modification of the franchisee's territory. However, the FDD explicitly states that these Minimum Performance Standards should not be considered financial performance representations for the franchised business. This means that Craters & Freighters does not guarantee that a franchisee will achieve this level of revenue, and it is merely a benchmark for acceptable performance.
After the third year, Craters & Freighters will determine the Minimum Performance Standards and Minimum Monthly Royalty Fees for years 4 through 15 of the Franchise Agreement. The franchisor will provide an amendment to the Franchise Agreement reflecting these changes. The decision will be based on factors such as population, demographic and economic factors, competition, market penetration, the growth rate of other Craters & Freighters Franchised Businesses, and other relevant factors. This implies that the performance standards can be adjusted based on the specific circumstances of the territory and the overall performance of the Craters & Freighters system.