How is the monthly License Fee calculated for Precision Door Service franchisees?
Precision_Door_Service Franchise · 2025 FDDAnswer from 2025 FDD Document
applicable to new franchisees.
Notes:
- License Fees. From and after you execute your Franchise Agreement, you begin to report Gross Sales and pay us a monthly license fee (the "License Fee"), equal to the greater of: (i) a percentage of the previous month's Gross Sales with the percentage determined as described in Table 1 above; or (ii) the applicable Minimum License Fee described in Table 2 above. For avoidance of doubt, all Gross Sales generated by the Business in servicing customers in TAFS or under the Preferred Lead Program or any Key Accounts program shall be subject to the License Fee.
If you currently perform services that are related to, but distinguishable from the services to be performed by the Business, you may elect, if we consent, in our sole discretion, to exclude that work from your franchise. If so, the services to be excluded must be specifically listed as Excluded Services performed by your Existing Business on Schedule I to the Franchise Agreement. If you do not currently perform these services or sales in an existing business but elect to start offering those services in the future you will not have the option of excluding those services from the franchise.
For avoidance of doubt, if you are purchasing an operating Business (as opposed to a territory that has not yet been developed) or you are signing a renewal Franchise Agreement, you will pay us a License Fee beginning the first month you sign your Franchise Agreement.
Source: Item 6 — OTHER FEES (FDD pages 28–36)
What This Means (2025 FDD)
According to Precision Door Service's 2025 Franchise Disclosure Document, the monthly license fee is calculated as the greater of a percentage of the previous month's gross sales or a minimum license fee. The percentage ranges from 4% to 6% of monthly gross sales, depending on the calendar year's annual gross sales. For instance, if the annual gross sales are up to $3,499,999, the license fee is 6% of monthly gross sales. If sales range from $3,500,000 to $6,999,999, the fee is 5%, and for sales of $7,000,000 and above, it is 4%.
The minimum monthly license fee is based on the number of single-family homes with a detached unit (SFHUD) in the territory. During the first 12 months, the minimum fee is $0, regardless of the SFHUD count. However, this fee increases over time. For example, if the SFHUD is between 0 and 150,000, the minimum monthly license fee is $1,000 for months 13-18, $1,500 for months 19-24, and $2,000 from month 25 to the end of the term.
For territories with higher SFHUD counts, the minimum fees are correspondingly higher. For instance, a territory with 500,001 to 1,000,000 SFHUD has minimum monthly fees of $3,000, $4,000, and $5,000 for the same periods. A Precision Door Service franchisee will pay the higher of either the percentage of gross sales or the minimum fee based on their territory's SFHUD count and the stage of their franchise agreement.
Prospective franchisees should carefully consider their projected gross sales and the SFHUD count in their territory to understand the potential license fee obligations. Accurately estimating these figures is crucial for financial planning and assessing the profitability of the franchise. Franchisees should also be aware that all gross sales generated by the business, including those from servicing customers in TAFS, the Preferred Lead Program, or any Key Accounts program, are subject to the license fee.