How does Focus Cfo compensate franchisees instead of charging a royalty fee?
Focus_Cfo Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty Fee | None (Note 1) | N/A | Unlike a traditional franchise model, you will not be required to pay any ongoing royalty payments. You will receive a percentage of the revenue associated with clients in your Book of Business as well as a percentage for those services that you directly performed. (FA §4, 8, Att. B) |
Notes:
(1) Focus CFO has the right to change the compensation policy by giving Franchisees at least 30 days' notice. The current base compensation is as follows: For clients in the Franchisee's Book of Business with a signed PSA dated in months one through thirteen after signing the Franchise Agreement, the Franchisee will receive a base rate of thirty percent (30%) of the CFO Services revenue collected on said clients for the life of the accounts. For clients in the Franchisee's Book of Business with a signed PSA dated in months fourteen through twenty-four after signing the Franchise Agreement, the Franchisee will receive a base rate of twenty-five percent (25%) of the CFO Services revenue collected on said clients for the life of the accounts. For clients in the Franchisee's Book of Business with a signed PSA dated after the Franchisee's twenty-fourth month after signing the Franchise Agreement, the Franchisee
will receive a base rate of twenty percent (20%) of the CFO Services revenue collected on said clients. The base rate on these accounts shall increase as the calendar year-to-date collections on their Book of Business on a territory-by-territory basis reaches the following tiers: $1 - $550,000 = 20%; $550,001 - $1,100,000 = 25%; $1,100,001 - $1,650,000 = 30%; revenue over $1,650,000 = 35%. The compensation policy is found in Attachment B to the Franchise Agreement.
Source: Item 6 — Other Fees (FDD pages 11–13)
What This Means (2025 FDD)
According to Focus Cfo's 2025 Franchise Disclosure Document, instead of charging franchisees a royalty fee, Focus Cfo compensates them with a percentage of the revenue generated from clients in their "Book of Business" and for services they directly perform. The compensation structure is based on when the client's Professional Services Agreement (PSA) is signed relative to the franchisee's start date. For clients with PSAs signed within the first 13 months, the franchisee receives 30% of the CFO Services revenue for the life of the account. This percentage decreases to 25% for clients signed between months 14 and 24. After 24 months, the base rate is 20%.
However, the base rate of 20% can increase based on the calendar year-to-date collections within the franchisee's territory. Once collections reach between $550,001 and $1,100,000, the rate increases to 25%. If collections rise to between $1,100,001 and $1,650,000, the rate goes up to 30%. For revenue exceeding $1,650,000, the franchisee's compensation increases to 35%.
This compensation policy is subject to change, as Focus Cfo retains the right to modify it with at least 30 days' notice to franchisees. The specifics of the compensation policy are detailed in Attachment B to the Franchise Agreement. This system incentivizes franchisees to acquire clients early in their franchise term to maximize their long-term revenue share and to grow their territory's overall revenue to achieve higher compensation tiers.