What is the royalty fee for a Devon Creek franchise during its first 12 months of operation?

According to Devon Creek's 2024 Franchise Disclosure Document, the royalty fee structure is tiered based on the number of months since the franchise began operations. During the initial 12 months (months 0-12), a Devon Creek franchisee is required to pay a royalty fee equivalent to 4% of the Gross Revenue generated weekly by their franchise.

After the first year, the royalty fee increases. From months 13 through 24, the royalty fee is 5% of the Gross Revenue generated weekly. After 24 months, the royalty fee increases again to 6% of the Gross Revenue generated weekly.

This tiered structure means that new Devon Creek franchisees benefit from a lower royalty rate during their first year of operation, which can help with cash flow and initial investment recovery. As the franchise matures, the royalty rate increases, aligning with the expectation of higher revenue generation. Franchisees should carefully consider these escalating royalty fees when projecting their long-term profitability and financial planning.