What is the minimum royalty per month for an Mrcool franchise from the fourth year of operation onwards?
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 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
According to Mrcool's 2025 Franchise Disclosure Document, the minimum royalty fee payable by a franchisee from the fourth year of operation is $2,160 per month. This minimum royalty payment is a fixed amount that Mrcool franchisees must pay, regardless of their gross sales.
It's important to note that while there is a minimum royalty, Mrcool retains the right to increase the royalty rate in the future, but with certain limitations. The royalty rate cannot exceed 2.5% of the franchisee's monthly Gross Sales, and Mrcool cannot increase the royalty rate by more than 0.5% in any calendar year during the term of the agreement.
Furthermore, Mrcool reserves the right to modify the minimum royalty in any Renewal Franchise Agreement based on their reasonable business judgment. However, the minimum royalty during any renewal term will not be less than the $2,160 per month set forth for Year 4 and thereafter. This ensures that Mrcool franchisees will have a consistent minimum royalty payment to factor into their financial planning, while also allowing for potential adjustments based on the performance and circumstances of the franchise.