What are the two options for calculating the Royalty Fee for an Expense Reduction Analysts franchise?
Expense_Reduction_Analysts Franchise · 2025 FDDAnswer from 2025 FDD Document
REEMENT AND HAVING EXPLICITLY ACCEPTED ALL THE SECTIONS CONTAINED.**
EXHIBIT 1 – DATA SHEET
Section 1. DATE OF THIS AGREEMENT
Section 2. FRANCHISEE DETAILS
Name:
Company # (if applicable):
Company place of registration:
Address:
Telephone:
Personal email address:
Section 3. GUARANTOR(S)
Name(s):
Address(es):
Telephone Number(s):
Section 4. COMMENCEMENT DATE
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What This Means (2025 FDD)
According to Expense Reduction Analysts's 2025 Franchise Disclosure Document, there are two options for calculating the royalty fee. The royalty fee will be the greater of either 15% of Net Cumulative Receipts for the immediately preceding calendar month, or a minimum royalty fee. The minimum royalty fee is $1,024.00 per month for the first thirty-six months after the Commencement Date, and $1,280.00 per month thereafter during the remaining periods of the Initial Term of the Agreement.
The minimum royalty fees may be adjusted annually based on any increase published in the CPI (Consumer Price Index). This means that as the cost of living increases, the minimum amount a franchisee pays in royalties could also increase, regardless of their revenue.
For a prospective Expense Reduction Analysts franchisee, this means that during the first three years, they will pay either 15% of their monthly receipts or $1,024, whichever is higher. After the first three years, this minimum increases to $1,280 per month, subject to potential CPI adjustments. Franchisees need to factor these minimum payments into their financial projections to ensure they can meet their royalty obligations, especially during periods of lower revenue.