Succession terms tested and adopted (payment cap, deferred royalty and protected income)

Under the original terms (8% of takings, royalty from day one) a typical tendered NEA stall would leave its successor $1,669 a month, or $1,227 after the royalty, below the $2,220 assistant benchmark. With the cap, a typical stall pays $925 a month and retires the goodwill in 4.2 years, while a queue stall pays exactly as before. Starting the royalty once the mortgage is retired leaves the retiree's total unchanged and only moves the timing. The protected income then guards the lean months: the payment and the royalty never take the successor's monthly profit below $1,500. In 4,000 simulated hand-overs it cuts the quitting the payment causes from 16% to 0.5% of successors (Succession Economics, E.1.4). Succession Economics, E.1.5 then sizes the first-loss reserve: it should be a revolving lump sum kept at or above the P95 payout of the open book, not an annual spend.

Who pays

The library gives this mechanism no who-pays tag of its own.

What it builds on

The first-draft terms in §4.3 and §4.4: 8% of gross (floor $900, cap $2,200) and a 2.5% royalty from day one.

Who gains

Hawkers

If it is an ordinary stall, the payments are gentler, so the new cook does not earn less than the person washing up (Succession Economics, E.1). A lean quarter cannot push the new cook's profit below $1,500 (§4.3).

Families

The retiree's total is unchanged; only the timing moves (Succession Economics, E.1).