For a My Salon Suite franchise, what is the monthly royalty fee based on?
My_Salon_Suite Franchise · 2025 FDDAnswer from 2025 FDD Document
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- A. Franchise Fee. Franchisee shall pay to Franchisor, upon execution of this Franchise Agreement, a non-refundable initial franchise fee in the amount identified on Attachment A ("Initial Franchise Fee"), The entire Initial Franchise Fee is deemed fully earned upon payment and is not refundable under any circumstances, in consideration of:
- (i) administrative, legal, and other expenses incurred by Franchisor in granting this franchise; and
- (ii) Franchisor's lost or deferred opportunity to enter into this Franchise Agreement with others.
- B. Royalty Fee. Franchisee shall, on or before the tenth (10th) day of each month, pay to Franchisor a monthly royalty fee ("Royalty Fee") equal to two and three-quarters percent (2.75%) of Gross Revenues for the previous month for the first six (6) months that the Franchised Business is open. Beginning the seventh (7th) month through the twelfth (12th) month that the Franchise Business is open, Franchisee shall, on or before the tenth (10th) day of each month pay to Franchisor a monthly Royalty Fee equal to five and one-half percent (5.5%) of Gross Revenues.
Source: Item 23 — RECEIPTS (FDD pages 95–230)
What This Means (2025 FDD)
According to My Salon Suite's 2025 Franchise Disclosure Document, the monthly royalty fee is based on a percentage of gross revenues, with a minimum amount required after the initial period. For the first six months the franchise is open, the royalty fee is 2.75% of Gross Revenues for the previous month. From the seventh through the twelfth month, the royalty fee increases to 5.5% of Gross Revenues.
Starting in the thirteenth month and continuing for the remainder of the franchise agreement term, the monthly royalty fee is the greater of $1,000 or 5.5% of Gross Revenues. This means that even if a My Salon Suite location's gross revenues are low, the franchisee must still pay a minimum royalty of $1,000 per month.
Notably, if a franchisee is converting an existing business to a My Salon Suite franchise and has not commenced operation as a Conversion Franchise within 90 days of signing the agreement, they will begin paying a minimum monthly Royalty Fee of $1,000 starting the month after the 90-day period until the conversion franchise begins operation. This incentivizes a quick conversion process.