G.5The Succession Lab

What a successor pays, year by year, under the terms the plan adopts: each month the lower of 8% of takings and 30% of verified profit, but never less than $600 or more than $2,200, and never so much that it leaves the successor under $1,500 a month of his own profit. At a typical tendered stall the $47,536 of goodwill (what a stall's name, recipes and regulars are worth when it changes hands) is paid off in 4.9 years; then the family royalty runs for up to ten years.

These are illustrations, not forecasts: a steady 2026 month, repeated, with the successor keeping 95% of the customers and goodwill at 15 months of the seller's net. They run through the succession test's month-by-month hand-over, the same calculation as the 4,000 simulated hand-overs of E.1, Can the Business Pay for Its Own Succession?, with no noise and no growth. When an outside successor takes over a subsidised stall, the rent rises to the $1,250 market rent NEA assesses in three equal steps over three years. NEA already phases the rent in this way when such a stall is assigned, and the plan asks NEA to confirm the same for Hawkers Succession Scheme (HSS) successors (§2.3). Every value is Derived; the terms are the plan's own, marked Assumption.

G.5.1The schedules, by stall type

"Keeps" is the successor's take-home a month after the payment, the royalty and the 1.5% escrow (a neutral account that collects the payments and pays them out) fee, before MediSave and tax. Year-by-year schedules for every case are in the download. g5-schedules.csv g5-summary.csv

Typical tendered stall

Subsidised stall, outside successor

G.5.2The royalty, its cap and its buy-out

The Family Name Royalty is 2.5% of takings. It starts only when the mortgage is paid off, can never leave the successor below the protected income, and runs for 10 years at most. The successor may buy it out at any time for a price set in advance (a published multiple of a year's royalty). The model fixes no price, so the table shows only what royalties remain at each anniversary, added up with no allowance for the time value of money: the most a fair buy-out could ask. g5-royalty.csv

G.5.3What licences pay masters' families

The Heritage Plate's income is split 40% to masters' families, 40% to the retirement match and 20% to the Seed Bank. Its families' share, a year, under each failure rate (G.4.11, When licensees fail): g5-licences.csv