What are the continuing royalty and marketing fees for Expense Reduction Analysts based on?
Expense_Reduction_Analysts Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchise agreements also provide for continuing royalty and marketing fees which are based on gross billings and are payable when client billings are rendered. The royalty fee, 15% of gross billings, compensates the Company for various support services that it provides to the franchise on an ongoing basis and is subject to a variable minimum fee. Royalty fees are recognized as revenue when receipts from client billings are received.
The marketing fee, 3% of gross billings, funds various marketing efforts as determined by the Company; in the past, marketing fees were recorded as Due to Marketing Campaign, when receipts from client billings are received, until marketing expenditures are incurred. Under Topic 606, franchise marketing fees and related cost are presented on a gross basis, as revenue and expense, in the consolidated statement of operations, rather than net of operating expenses on the consolidated balance sheet. Impacts resulting from adoption were material to the consolidated statement of operations.
Amount: For Marketing Contribution You must pay 3% of Your Net Cumulative Receipts for the immediately preceding Month.
Amount: Franchisor's then-current fee (which is $1,269.76 as of the date this Agreement is executed). Franchisor may adjust the Technology Fee annually by any increase in published in the CPI as defined in section 34.15.
Source: Item 23 — RECEIPTS (FDD pages 58–215)
What This Means (2025 FDD)
According to Expense Reduction Analysts' 2025 Franchise Disclosure Document, both the continuing royalty and marketing fees are based on gross billings. The royalty fee is 15% of gross billings and compensates Expense Reduction Analysts for the support services it provides to the franchisee. This royalty fee is also subject to a variable minimum fee.
The marketing fee is 3% of gross billings and is used to fund various marketing efforts as determined by Expense Reduction Analysts. Both the royalty and marketing fees are payable when client billings are rendered.
In addition to the royalty and marketing fees, Expense Reduction Analysts franchisees must also pay a technology fee. As of the date of the agreement, this fee is $1,269.76, and Expense Reduction Analysts may adjust it annually based on increases in the Consumer Price Index (CPI).