What is the minimum royalty fee a Mr. Sandless franchisee must pay monthly?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
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ITEM 6 OTHER FEES
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty Fee – Mr. Sandless Business | 6% of Gross Sales or $600, whichever is greater | No Royalty Fee for the first 3 months after opening, transfers not included. Then monthly, not later than the 15th day of each month | Royalties are payable on your Gross Sales for the previous calendar month. If the 15th day of any month is not a business day, then payment is due on the next business day. See Note 1. |
| Advertising Fund | 1% of Gross Sales | Payable at the same time and in the same manner as the Royalty Fee | You must contribute to our Advertising Fund (described in Item 11) |
| Required Minimum Expenditure for Local Marketing and Advertising | Minimum $1,500 per month. | As incurred. | Payable to third parties. All advertising must be pre-approved by us. See footnote 2. |
| Additional Territory Fee | $5,000 per 100,000 population | As incurred upon signing an Amendment to add Territory | If you meet our qualifications, you have the option to purchase additional territory to a maximum of 4 territories under your Franchise Agreement. |
| Surveys | $140 | On demand | If we conduct a customer satisfaction survey for your Business and the results of the survey are below our minimum standards, we have the right to bill you for the cost of the survey. |
Source: Item 6 — OTHER FEES (FDD pages 10–13)
What This Means (2025 FDD)
According to Mr. Sandless's 2025 Franchise Disclosure Document, the royalty fee is 6% of gross sales or $600, whichever is greater. This royalty fee is paid monthly, specifically no later than the 15th day of each month for the previous calendar month's gross sales. If the 15th of the month falls on a non-business day, the payment is due on the next business day.
However, new Mr. Sandless franchisees are exempt from paying this royalty fee for the first three months after opening their franchise location, although this does not apply to transfers. This initial grace period can provide some financial relief as the franchisee establishes their business.
It is important to note that "Gross Sales" includes all revenues generated from the business, encompassing sales of goods and services. However, it excludes any taxes collected from customers and refunds or exchanges for items or services, provided these sales were previously included in gross sales. This definition of gross sales is crucial for accurately calculating the royalty fee owed to Mr. Sandless.