Are Mr. Sandless franchisees required to pay royalties during the first three months after opening?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
ial Franchise Fee**
In consideration of the execution of this Agreement and our granting to you the franchise covered hereby, you agree to pay to us an Initial Franchise Fee (the "Initial Franchise Fee"), payable upon the execution of this Agreement, which sum shall be deemed fully earned by us upon receipt thereof and is non-refundable. The Initial Franchise Fee to be paid by you hereunder is as set forth on the Data Sheet.
10.2 Royalty Fee
Each month, you must pay us a royalty fee (the "Royalty Fee"), no later than the fifteenth (15th) day of each calendar month based on the Business being operated pursuant to this Agreement. The Royalty Fee payable hereunder shall be an amount equal to six percent (6%) of the Gross Sales (as defined below) generated in the immediately preceding calendar month with a minimum due of Six Hundred Dollars ($600). "Gross Sales" includes all revenues you generate from all business conducted at or from the Business during the preceding reporting period, including amounts received from the sale of goods and services of any nature whatsoever. Gross Sales does not include the amount of any tax imposed by any federal, state, municipal or other governmental authority on the purchase by the customer, through you, including but not limited to sales tax. You agree to pay such amounts as
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2025 FDD)
According to Mr. Sandless's 2025 Franchise Disclosure Document, new franchisees do not have to pay royalty fees during their first three months of operation. After this initial period, franchisees must pay a royalty fee each month, no later than the 15th day of the month.
The royalty fee is 6% of the gross sales generated in the immediately preceding calendar month, with a minimum payment of $600. Gross sales include all revenues from business conducted at or from the Mr. Sandless business, including sales of goods and services. Gross sales do not include taxes imposed on the customer. Sales for which the full purchase price has been refunded or the item exchanged are excluded from gross sales at the time of refund or exchange, provided that any such sales have previously been included in Gross Sales.
This royalty fee structure is fairly typical in the franchise industry. The initial three-month grace period can be a significant benefit to new Mr. Sandless franchisees, allowing them to establish their business without the immediate pressure of royalty payments. However, it's important to note that this royalty waiver does not apply to transfers of existing franchises.