What is the minimum annual royalty fee for a Devon Creek franchise during months 13-24 of operation?
Devon_Creek Franchise · 2024 FDDAnswer from 2024 FDD Document
y your Franchise | Or
| Months since beginning operations | Minimum Annual Royalty |
|---|---|
| 0 - 12 | $6,000 annually |
| 13 – 24 | $10,000 annually |
| 25 – 36 | $14,500 annually |
| 37 – 48 | $21,500 annually |
| 48- |
Source: Item 6 — OTHER FEES (FDD pages 8–16)
What This Means (2024 FDD)
According to Devon Creek's 2024 Franchise Disclosure Document, the minimum annual royalty fee for a franchise operating between months 13 and 24 is $10,000. This fee structure is part of a tiered system where the minimum annual royalty increases as the franchise matures.
This means that a new Devon Creek franchisee can expect to pay at least $10,000 in royalty fees during their second year of operation, regardless of their gross revenue. It is important to note that this is the minimum royalty. Devon Creek also collects a royalty fee based on a percentage of gross revenue, as detailed elsewhere in the FDD. If the percentage of gross revenue exceeds the minimum annual royalty, the franchisee will pay the higher amount.
This escalating minimum royalty fee structure incentivizes franchisees to grow their revenue. The franchisee needs to ensure their business performs well enough to exceed the minimum royalty threshold to avoid essentially overpaying on royalties. Prospective franchisees should carefully consider their projected revenue and how it aligns with these increasing minimum royalty obligations.