How is the Dryject Annual Royalty Service Fee calculated?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
|### FOOTNOTES TO ITEM 6
Note 1. Royalty Service Fee. In partial consideration of the franchise granted, Franchise Owner agrees to pay to Company an Annual Royalty Service Fee of 8% of the annual Gross Revenues generated by Franchise Owner in the Franchised Business or the annual total of the minimum monthly Royalty Service Fee amounts, whichever is greater. The Annual Royalty Service Fee will be calculated using a calendar year.
The minimum monthly payment toward this Annual Royalty Service Fee will be based on calendar years: the first partial calendar year, starting month four: $450 per month; the second full calendar year: $900.00 per month or $10,800/year; the third full calendar year: $1,300.00 per month or $15,600/year; the fourth full calendar year and forward: $1,450.00 per month or $17,400/year. Annual Royalty Service Fee Gross Revenue Equivalent is: Annual Minimum Royalty Service Fee divided by .08 (8% Royalty). For example, the Annual Royalty Service Fee Gross Revenue Equivalent for the second year is $135,000 ($10,800 divided by .08).
Franchise Owner must report to Company the Gross Revenues of the Franchised Business operations on a monthly basis. Payments toward the Annual Royalty Service Fee must be made on a monthly basis and must be paid on or before the 15th day of the month for the preceding month.
Once Franchise Owner's cumulative monthly Gross Revenues during the course of the calendar year exceed Franchise Owner's Annual Royalty Service Fee Gross Revenue Equivalent, Company will collect the minimum monthly Royalty Service Fee plus an additional 8% on the amount of the monthly Gross Revenues that exceeds the Annual Royalty Service Fee Gross Revenue Equivalent.
For example, the Annual Minimum Royalty Service Fee for the second full calendar year will be $900.00 multiplied by 12 (months) for a total of $10,800.00. Franchise Owner will pay Company $900.00 a month until Franchise Owner's Gross Revenues are more than the Annual Royalty Service Fee Gross Revenue Equivalent of $135,000.00 ($10,800 divided by .08). If Franchise Owner's monthly Gross Revenues for September are $50,000.00 and the monthly Gross Revenues for January through September are $150,000.00, then Franchise Owner's payment for September will be the minimum monthly payment of $900.00 plus $1,200.00 (8% of $15,000.00, the amount in excess over the Annual Royalty Service Fee Gross Revenue Equivalent). If Franchise Owner's monthly Gross Revenues for October total another $50,000.00, then Franchise Owner's payment
for October will be the minimum monthly payment of $900.00 plus $4,000.00 (8% of $50,000.00, that month's amount in excess over the Annual Royalty Service Fee Gross Revenue Equivalent).
You must authorize your bank to accept automatic withdrawals for all fees to us through Electronic Funds Transfer (EFT) of the stated amount from your bank into our bank account when due, and provide us with all documents necessary to direct your bank to honor these pre-authorized bank debits.
Upon our request, you will also be required to sign the forms and complete the procedures we have established for paying these fees via either Visa or Master Card. You must have sufficient credit available on the specified credit card account for the charge to be honored by our bank or other financial institution and agree to advise us in advance of any change in its credit status or card to be charged. You will be responsible for any fees we incur in processing these payments. We will submit charges only for the correct Royalty Service Fees, National Marketing Fund Fees and other outstanding balances due as required by your Franchise Agreement and retain this right for up to six months after expiration, termination or transfer.
You must report to us your monthly Gross Revenues by the 15th of the following month. The term "Gross Revenues" means the amount of all receipts for the sale of any products or services by your Franchised Business and income of every other kind and nature related to the Franchised Business, whether for products or services, cash, exchange, or credit, regardless of collection in a case of credit, less any refunds; provided, however, that "Gross Revenues" will not include any sales taxes or other taxes collected by Franchise Owner for transmittal to the appropriate taxing authority.
Note 2. National Marketing Fund.
Source: Item 6 — OTHER FEES (FDD pages 14–18)
What This Means (2025 FDD)
According to Dryject's 2025 Franchise Disclosure Document, the Annual Royalty Service Fee is the greater of 8% of the annual Gross Revenues or the annual total of minimum monthly Royalty Service Fee amounts. This fee is calculated on a calendar year basis. The minimum monthly payment varies depending on the year of operation. For the first partial calendar year (starting month four), it is $450 per month. In the second full calendar year, it increases to $900 per month or $10,800 per year. The third full calendar year sees a further increase to $1,300 per month or $15,600 per year. From the fourth full calendar year onward, the minimum monthly payment is $1,450 per month or $17,400 per year. Franchise Owners must report their Gross Revenues monthly and make payments by the 15th of the following month. Payments are typically made via Electronic Funds Transfer (EFT).
Dryject provides an example to illustrate how the Annual Royalty Service Fee Gross Revenue Equivalent is calculated. For the second year, the Annual Royalty Service Fee Gross Revenue Equivalent is $135,000, which is calculated by dividing the annual minimum royalty service fee of $10,800 by 0.08 (8%). Once a Franchise Owner's cumulative monthly Gross Revenues exceed their Annual Royalty Service Fee Gross Revenue Equivalent, Dryject will collect the minimum monthly Royalty Service Fee plus an additional 8% on the amount of the monthly Gross Revenues that exceeds the Annual Royalty Service Fee Gross Revenue Equivalent.
For instance, if a Dryject Franchise Owner's monthly Gross Revenues for September are $50,000 and the total Gross Revenues from January through September are $150,000, the payment for September would be the minimum monthly payment of $900 plus $1,200 (8% of $15,000, the amount exceeding the Annual Royalty Service Fee Gross Revenue Equivalent). If October's Gross Revenues are another $50,000, the payment for October would be the minimum monthly payment of $900 plus $4,000 (8% of $50,000, the amount exceeding the Annual Royalty Service Fee Gross Revenue Equivalent for that month).
It is important to note that failure to pay the Royalty Service Fee by the due date may result in a Non-Compliance Fee of $100 per incident, plus 1½% interest per month on the unpaid balance, or the maximum interest permitted by law. Dryject also reserves the right to adjust certain fees annually based on changes in circumstances, such as increased vendor costs or labor costs.