What is the minimum royalty fee per month for an Mrcool franchise during its fourth year and thereafter?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
| Year | Minimum Royalty Per Month |
|---|---|
| 1 | $1,000 per month |
| 2 | $1,500 per month |
| 3 | $1,800 per month |
| 4 and thereafter | $2,160 per month |
Source: Item 6 — OTHER FEES (FDD pages 12–18)
What This Means (2025 FDD)
According to Mrcool's 2025 Franchise Disclosure Document, franchisees are required to pay a minimum monthly royalty fee. The minimum royalty fee increases over the first three years of operation. In the fourth year, and for each year thereafter, the minimum royalty fee is $2,160 per month.
It's important to note that Mrcool retains the right to increase the royalty rate in the future. However, any increase is limited to a maximum of 0.5% per calendar year and cannot exceed 2.5% of the franchisee's monthly Gross Sales. This provides some predictability, but franchisees should be aware that royalty costs could rise over time.
Prospective Mrcool franchisees should carefully consider this escalating minimum royalty fee schedule when projecting their potential earnings. While the royalty is also tied to a percentage of gross sales (1%), the franchisee must pay whichever is greater: the percentage of gross sales or the minimum royalty. Therefore, it is crucial to estimate sales accurately to ensure the business can comfortably meet these royalty obligations, especially as they increase in the initial years.