What is the definition of 'Administrative Threshold Amount' in the context of Petro Stopping Center's administrative fee?
Petro_Stopping_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
ees in the future based on a number of factors, including: (x) the number of prior extensions requested; (y) the number of franchised locations you have; and (z) situation-specific factors. The Opening Extension Fee is payable if and when we grant an opening extension.
OTHER FEES
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Ongoing Royalty Fees | You must pay us (i) 4.5% of all Non-QSR Gross Sales up to and including Six Hundred Thousand Dollars ($600,000) per month (the "Threshold Amount") and 2% of all Non QSR Gross Sales in excess of the Threshold Amount; (ii) 2% of all QSR Gross Sales; |
Source: Item 6 — OTHER FEES (FDD pages 27–32)
What This Means (2025 FDD)
According to Petro Stopping Center's 2025 Franchise Disclosure Document, the 'Administrative Threshold Amount' is defined in relation to the administrative fee franchisees must pay. Petro Stopping Center requires franchisees to pay an administrative fee of 0.3% of all Non-Fuel Gross Sales up to and including $600,000 per month. This $600,000 amount is referred to as the "Administrative Threshold Amount."
This threshold is significant because the administrative fee only applies to Non-Fuel Gross Sales up to this amount. If a franchisee's Non-Fuel Gross Sales exceed $600,000 in a month, they will not owe the 0.3% administrative fee on the amount exceeding $600,000. The administrative fee, like the ongoing royalty fee and advertising fee, is payable monthly, specifically 10 business days following the Report Day, via electronic funds transfer.
The FDD also states that the Administrative Threshold Amount is subject to change annually based on the CPI Adjustment. This means that the $600,000 threshold may increase each year to account for inflation, potentially allowing franchisees to generate more revenue before the administrative fee applies. Prospective franchisees should monitor these adjustments to understand how their administrative fee obligations may evolve over time.