Considering a Which Wich Franchise? Don’t Overlook These 37 Important Franchise Fees

This post was updated on June 25, 2017 to reflect information from Which Wich’s 2017 FDD.

If you are considering a Which Wich franchise, don’t get blindsided by these 37 important franchise fees (from the initial franchise fee, to the royalty fee, to 35 other fees found in Items 5 and 6 of Which Wich’s 2017 FDD).

• All fees and expenses described below are nonrefundable and, unless otherwise indicated, Which Wich imposes all fees uniformly, and all fees are payable to it via electronic funds transfer.

1.  Document Preparation Fees:  $250 to $750

• When Which Wich approves your franchise application for your first Store, you will pay Which Wich a $750 application and document preparation fee for your Development Agreement and first Franchise Agreement.

• You also must reimburse Which Wich for any out-of-pocket attorneys’ fees that it incurs in connection with awarding you a franchise.

• When Which Wich prepares your second and additional Franchise Agreements, if applicable, you will pay Which Wich $250 to prepare each Franchise Agreement and $250 for any amendment agreement that may be required.

2.  Initial Franchise Fee:  $25,000 to $30,000

• Which Wich’s standard initial franchise fee is $30,000 for your first Store and $25,000 for each additional Store.

• If you are a new franchisee, you must develop a minimum of two Stores (see Development Program below).

• Once you have completed the development of your first two Stores (or if you are an existing franchisee), and if Which Wich grants you the right to open an additional Store, you will have the option to either (a) amend your Development Agreement to expand the number of Stores you commit to develop, plus the applicable development fee; or (b) enter into a single Franchise Agreement.

• Payment of the applicable initial franchise fee is due at the time you sign the additional Franchise Agreement.

• The initial franchise fee is calculated uniformly for all franchisees and is nonrefundable upon payment.

Veteran’s Discount:  $10,000

• Which Wich offers a military discount to veterans who have a certified DD214 issued by the U.S. Department of Defense.

• The discount is $10,000 off the initial franchise fee of $30,000 for the first Franchise Agreement entered into for the development of a new Store. Which Wich may, but is not required to, offer this discount on second and subsequent Franchise Agreements entered into for the development of new Stores.

3.  Standard Development Program:  100% of the initial franchise fee for the first Store ($30,000), plus 50% of the initial franchise fee for each additional Store ($12,500, which is half of $25,000) to be developed under the Development Agreement

• At the time Which Wich awards you multi-unit development rights, you must sign its Development Agreement.

• When you sign the Development Agreement, you will pay Which Wich a development fee equal to 100% of the initial franchise fee for the first Store ($30,000) plus 50% of the initial franchise fee for each additional Store ($12,500, which is half of $25,000) to be developed under the Development Agreement.

• If it is necessary to amend the Development Agreement to reflect negotiated changes, you will pay Which Wich an additional $250 when the Development Agreement is signed to help offset its legal costs of preparing the amendment.

• At the same time you sign the Development Agreement, you will sign the Franchise Agreement for the first Store, and Which Wich will credit $30,000 of your development fee payment to satisfy the $30,000 initial franchise fee due under the Franchise Agreement.

• When you sign each additional Franchise Agreement under the Development Agreement, Which Wich will credit $12,500 of your development fee payment toward payment of the initial franchise fee of $25,000, and you will pay Which Wich the remaining $12,500 initial franchise fee balance at that time.

• The development fee is calculated uniformly for all franchisees and is nonrefundable upon payment.

4.  Large Multi-Unit Development Program:  $20,000 per Store

• If you wish to acquire rights to develop five or more Stores with no territory protection, Which Wich will reduce the initial franchise fee for each Store to be developed under the Development Agreement to $20,000 per Store.

• You must sign Which Wich’s Development Agreement and pay 100% of the initial franchise fee for each Store to be developed under the Development Agreement. For example, if you are developing five Stores with no territory protection, you will pay the nonrefundable development fee of $100,000 at the time you sign the Development Agreement.

5.  Development Area Protection:  100% of the initial franchise fee for each Store to be developed under the Development Agreement

• Which Wich’s standard Development Agreement permits development of a certain number of Stores in a defined development area but does not provide territory protection.

• If you wish to acquire rights to develop five Stores under a Development Agreement with limited territory protection, Which Wich will grant you such rights in consideration of a nonrefundable development fee equal to 100% of the initial franchise fee for each Store to be developed under the Development Agreement.

• For example, if you are developing five Stores with limited territory protection, you will pay the nonrefundable development fee of $130,000 at the time you sign the Development Agreement.

• The development fee is calculated uniformly for all franchisees and is nonrefundable upon payment.

6.  Site Selection Assistance:  $500 per additional site visit, plus out-of-pocket expenses that Which Wich incurs in providing the assistance, including costs of transportation, lodging, and meals

• Before you select a site for your Store, at your request and/or if Which Wich determines it necessary, Which Wich’s representative will visit you one time in your development area, without charge, to either assist you in finding suitable sites or to evaluate sites that you have identified.

• If you request additional site visits or assistance, or if Which Wich believes additional site visits or assistance are necessary, you must pay Which Wich $500 per additional site visit and pay or reimburse it its out-of-pocket expenses that it incurs in providing the assistance, including costs of transportation, lodging, and meals.

• Once you have an approved site for the Store, you are responsible for site development and build-out.

7.  Pre-Opening Assistance Fee:  $500 for each pre-opening assistance visit

• Which Wich will provide you pre-opening assistance and advice it deems appropriate, by telephone or remote means, which may include advice regarding site development and build-out, employee staffing levels and recruiting resources, purchasing and inventory control, marketing methods, and general operational matters.

• Which Wich’s pre-opening assistance does not include onsite visits to the Store. If you request an on-site visit, or if Which Wich determines it is necessary, you must pay it $500 for each pre-opening assistance visit it makes to the Store, plus you must pay or reimburse it its out-of-pocket expenses that it incurs in providing the assistance, including costs of transportation, lodging, and meals.

8.  Opening Assistance Fee:  $5,000

• With respect to your first Store, Which Wich will provide 10 days of onsite opening assistance. To help reimburse it for its expenses related to this assistance, you must pay Which Wich an Opening Assistance Fee, which is a nonrefundable, flat fee of $5,000.

• If you ask Which Wich to provide additional assistance for your opening, Which Wich may charge you for it, based on its then-current per diem rate plus its related expenses, including costs of travel, lodging, and meals.

• Which Wich’s current per diem fee is $250 per day, and it reserves the right to increase the Opening Assistance Fee and per diem rate by 10% each year. These amounts are not refundable.

• With respect to your second or additional Stores, although it is not required to provide pre-opening or opening assistance, if you request its assistance, or if it considers the assistance necessary, Which Wich will provide the assistance for the same amount as the then-current Opening Assistance Fee.

9.  Royalty Fee:  6% of Gross Sales

• Due Date:  Weekly.

• You will pay the royalty fee by electronic funds transfer.

• Gross Sales is the total Selling Price of all services and products and all income of every other kind and nature related to your Which Wich Store, including income related to catering operations and special events and the full value of meals provided to your bona fide employees as a benefit of their employment (except you may deduct from Gross Sales the value of any employee discounts that are given during the week in which the meals are provided), whether for cash or credit and regardless of collection in the case of credit.

• Gross Sales does not include:

• (i) receipts from any public telephone, vending machine, or video games installed in your Which Wich Store, except for your share of the revenues;

• (ii) sales (or similar) taxes that you collect from your customers if you transmit them to the appropriate taxing authority;

• (iii) proceeds from isolated sales of trade fixtures that are not part of the products and services you offer and that do not have any material effect on the operation of your Which Wich Store;

• (iv) tips or gratuities paid directly by Store customers to your employees or paid to you and then turned over to these employees by you in lieu of direct tips or gratuities; or

• (v) returns to shippers or manufacturers.

• Gross Sales also does not include proceeds from the sale of gift certificates or stored value cards (all proceeds from the sale of gift certificates and stored value cards belong to Which Wich), but it does include the redemption value of gift certificates and stored value cards at the time purchases are made.

• You are responsible for the accurate reporting of gift certificate and stored value card sales and the corresponding impact on Gross Sales.

• You have until 30 days after the end of Which Wich’s fiscal year to notify it of any errors you made in calculating Gross Sales as those errors relate to the reporting of gift certificate and stored value card sales.

• “Selling Price” is defined as the non-discounted, regular menu price.

10.  Brand Development Fund Contribution:  2% of Gross Sales

• Due Date:  Weekly.

• You will contribute to the Brand Development Fund by electronic funds transfer.

11.  Media Fund:  up to 2% of Gross Sales

• Due Date:  Weekly; when instituted.

• Upon the opening of the 1,000th Which Wich Store, Which Wich may require you to contribute up to 2% of Gross Sales to help pay for the placement of national advertising.

• Payments will be made through electronic funds transfer.

12.  Local Advertising Requirement:  2% of Gross Sales

• Due Date:  Monthly.

• Which Wich may require all or a portion of the local advertising requirement dollars be contributed to a franchisee advertising association and/or to the Brand Development Fund.

• Which Wich may also require you to pay it directly your required local advertising contribution, then it will reimburse you for your actual local advertising expenditures and contribute the remainder to the Brand Development Fund.

• Payments will be made by electronic funds transfer.

13.  Franchisee Advertising Association:  as determined by the applicable Association; currently 0.5% to 1.75% of Gross Sales, depending on the location of the Association; all fees associated with forming the Association

• Due Date:  As determined by the applicable Association.

• You must participate in a franchisee Association, if Which Wich requires.

• The members of the Association must pay regular dues and all fees associated with the formation of the Association. Which Wich may require you to pay your required Advertising Association contributions to it via electronic funds transfer. If it does, it will then submit your contributions to the Association.

14.  Unauthorized Advertising:  $1,000 per occurrence

• Due Date:  When billed.

• Which Wich has the right, at its option, to assess you a $1,000 fee per occurrence for the use of any unauthorized marketing and advertising materials. If it assesses this fee, it is not limited or precluded from seeking other remedies available to it.

15.  Business Directory Listing:  cost

• Due Date:  On demand.

• You will place and pay the cost of business directory listings (which may be print and/or electronic format) in the directories and categories as Which Wich specifies.

16.  Merchandise for Resale; Equipment; Decor Items:  reasonable cost

• Due Date:  On demand.

• Which Wich may provide to you at a reasonable cost certain collateral merchandise for resale that identifies the system (for example, caps and t-shirts), equipment, and decor items.

17.  Related Promotional Costs:  varies per promotion

• Due Date:  On demand.

• You must participate, at your expense, in any loyalty programs, prize promotions, sweepstakes, meal deals, and/or any other promotional campaign that Which Wich designates.

18.  Interest:  18% per year or the maximum lawful rate

• Due Date:  On demand.

• Which Wich may charge interest on all overdue amounts.

19.  Non-Sufficient Funds Fee:  $50 for each returned check or draft (may be increased each year by an amount not to exceed 10% of the then-current amount), plus reimbursement of Which Wich’s costs incurred to collect

• Due Date:  On demand.

20.  Additional Opening Assistance:  if requested by you or required by Which Wich, then-current per diem, plus reimbursement of Which Wich’s travel-related expenses; its current per diem rate is $250

• Due Date:  Before additional training.

• You must also pay the expenses of your personnel who attend training.

• Subject to availability of Which Wich’s personnel.

21.  Additional Training:  cost of tuition as determined at the time, plus expenses of your personnel who attend training

• Due Date:  Before additional training.

• You must also pay the expenses of your personnel who attend training.

22.  On-Site Remedial Training:  then-current per diem fee for remedial training, plus reimbursement of Which Wich’s travel-related expenses; its current per diem rate is $250

• Due Date:  When billed.

• If you ask, or if Which Wich requires, Which Wich will (subject to availability) provide trained representatives to conduct onsite remedial training at your Store.

23.  Transfer Fee:  no fee to transfer for convenience of ownership or non-controlling interest, except reimbursement of Which Wich’s attorneys’ fees; for all other transfers: at Which Wich’s election, either $5,000 if transferee is an existing franchisee or $7,500 if transferee is not an existing franchisee

• Due Date:  With transfer application for transfer for convenience of ownership or non-controlling interest; when transfer is requested for all other transfers.

• Fee is nonrefundable.

• Convenience of ownership: There is no fee if an individual assigns his or her rights to a corporation, limited liability company, or other entity controlled by the same individual.

24.  Relocation Fee:  no fee if relocation is due to an event of force majeure; for requested relocations, there is a $5,000 Relocation Fee

• Due Date:  Upon approval of request to relocate.

25.  Private or Public Offering Fee:  reimbursement of Which Wich’s reasonable costs and expenses associated with the proposed offering

• Due Date:  When billed.

• Which Wich limits its review to the manner in which the offering materials treat Which Wich’s relationship with you.

26.  Renewal Fee:  50% of Which Wich’s then-current initial franchise fee

• Due Date:  Signing of renewal Franchise Agreement.

• You must give Which Wich at least 12 months’ and not more than 24 months’ notice to renew, and meet other renewal conditions.

27.  Inspection and Testing:  cost of inspection, if applicable, and cost of test

• Due Date:  When billed.

• Before approving a supplier at your request, Which Wich may require you to pay the cost of testing the supplier’s products and the cost of inspecting its facilities, including reimbursement of transportation, lodging, meals, and salary expense for individuals performing the evaluation.

28.  Indemnification:  varies according to loss

• Due Date:  On demand.

• You must defend and indemnify Which Wich against certain losses relating to your actions.

29.  Audit Fee:  cost of audit

• Due Date:  When billed.

• Payable if an audit shows you have understated any amount owed to Which Wich by 3% or more.

30.  Intranet Fee:  $100/month

• Due Date:  Monthly.

• The Intranet Fee is an amount Which Wich determines, not to exceed $100 per month in 2017; amount may be increased each year by 10% of the then-current monthly fee.

31.  Insurance Fee:  a reasonable amount based on Which Wich’s administrative expenses

• Due Date:  On demand.

• If you fail to maintain the required insurance, Which Wich may (but need not) obtain it for you. If it does, it will charge you a fee, plus its administrative expenses.

32.  Enforcement Costs (Administrative Fee):  will vary

• Due Date:  As incurred.

• If you do not comply with the Franchise Agreement, Which Wich has the right to charge you a fee not to exceed $100 per hour for costs it incurs in enforcing the Franchise Agreement due to your failure to comply with any provision, plus attorneys’ fees and other related costs.

33.  Online Ordering:  up to $200 per month

• Due Date:  When billed.

• You must participate in the customer online ordering program, and you must pay for the costs associated with the program; amount may be increased each year by 10% of the then-current monthly fee.

34.  Operating Days:  $250 per day, each day your Store is closed without permission

• Due Date:  On demand.

• You must open and operate the Store seven days a week unless otherwise directed in the Manual or previously approved by Which Wich in writing.

35.  Customer Comment Reimbursement:  will vary

• Due Date:  On demand.

• In the event customers contact Which Wich with complaints about your Store, you must reimburse it for any payments it makes to the customer, and the payment made to the customer will be at its discretion.

• Which Wich requires you to pay the Customer Comment Reimbursement Fee through electronic funds transfer.

36.  Equipment Replacement or Repair Fee:  will vary

• Due Date:  As incurred.

• In the event equipment is removed because it does not comply with System standards, Which Wich has the right to replace such equipment or to make arrangements to have such equipment serviced, repaired, and/or cleaned at your expense.

37.  De-identification Fee:  will vary

• Due Date:  On demand.

• Which Wich has the right, at its option and at your expense, to enter the Store premises and take all actions necessary to de-identify the premises as a Which Wich Store.

• Such costs incurred due to Which Wich’s de-identification efforts must be paid by you immediately upon notice.

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