Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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Considering a FASTSIGNS Franchise? Don’t Overlook These 18 Important Franchise Fees

by Franchise Chatter on February 20, 2017

in Franchise Fees, Sign Franchises



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Don't Invest in a Franchise Until You Check Out This List

FASTSIGNS Photo by Fastsigns Coquitlam

If you are considering a FASTSIGNS franchise, don’t get blindsided by these 18 important franchise fees (from the initial franchise fee, to the royalty fee, to 16 other fees found in Items 5 and 6 of FASTSIGNS’ 2016 FDD).

1.  Initial Franchise Fee:  $22,250 to $44,500

  • You will pay FASTSIGNS an initial franchise fee of $44,500 for the right to establish a single FASTSIGNS Center under a Franchise Agreement.
  • The initial franchise fee, if you establish an additional FASTSIGNS Center, is $22,250.
  • The initial franchise fee, if you establish a Satellite Center, is $22,250.
  • The initial franchise fee, if you are a Conversion Franchise, is $44,500.
  • The initial franchise fee, if you establish a Co-Brand Center, is $44,500.
  • If you are unable to obtain a location for the Center that FASTSIGNS approves within 90 days after you sign the applicable Franchise Agreement; or if you are unable to obtain the permits, licenses, and certifications you need to begin construction within 120 days after FASTSIGNS approves the location for the Center; or if you are unable to acquire sufficient financing to complete construction of the Center and to open the Center for business within 365 days after the date of the Franchise Agreement, FASTSIGNS may terminate the Franchise Agreement.
  • If it does so and you are in compliance with the post-termination obligations of the Franchise Agreement, FASTSIGNS will refund the initial franchise fee you actually paid, without interest, less $22,250.
  • FASTSIGNS is not obligated to return any fees you pay if the Franchise Agreement is terminated for any other reason.
  • This refund of the initial franchise fee is not applicable to Satellite Centers, additional FASTSIGNS Centers, Conversion Franchises, and Co-Brand Centers.
  • FASTSIGNS is a member of the International Franchise Association (“IFA”) and participates in the IFA’s VetFran Program. FASTSIGNS offers a reduced initial franchise fee of $22,250 to veterans of the U.S. Armed Forces who meet the requirements of the VetFran Program.

2.  Development Fee:  $15,000 per FASTSIGNS Center to be developed under the Development Agreement (excluding the first FASTSIGNS Center, for which the standard initial franchise fee must be paid)

  • The development fee is credited against the initial franchise fee due for each additional FASTSIGNS Center. You must pay an initial franchise fee of $22,250 (less the credit of $15,000) for each additional FASTSIGNS Center to be developed under the Development Agreement.

3.  Deposit for Supplies and Miscellaneous Items:  up to $20,000

  • Before you open your FASTSIGNS Center, FASTSIGNS may request that you pay a deposit to it towards supplies and miscellaneous items estimated to be up to $20,000.

4.  Initial Training Fee:  $0

  • FASTSIGNS does not charge a training fee to provide initial training prior to opening your Center (for up to 3 persons) for your graphic designer, visual communications specialist (or other designated personnel), or the Managing Principal that holds or may control not less than a 25% interest in the Franchisee.
  • At your request, FASTSIGNS will provide initial training to your additional personnel.

5.  Site Evaluation Fee:  varies

  • FASTSIGNS will assist you in locating a suitable site for your Center. The support it provides includes identifying local real estate brokers, conducting a market wide survey, and providing guidance in negotiating the terms for your lease.
  • In the event that a representative will make a trip to the proposed site, FASTSIGNS will pay all costs its representative incurs for one on-site evaluation; you may pay all costs (including costs of travel, lodging, meals, and wages) incurred for any additional on-site evaluations FASTSIGNS determines necessary or you request.
  • Site visits will be as needed and determined by FASTSIGNS.
  • Site selection costs are nonrefundable, and uniformly imposed on all franchisees requiring such assistance (however, the costs may vary from franchisee to franchisee based on the travel involved).

6.  Service Fee:  up to 3% of Gross Sales the first year. 6% of Gross Sales beginning the second year through the end of the term of the Franchise Agreement.

  • Due Date:  Monthly on the 15th.
  • You may receive an annual rebate on the Service Fee dependent upon achieving certain sales levels.
  • The reduction in the Service Fee for the first year is not applicable for the sale of an existing FASTSIGNS Center to a third party.

7.  Ad Fee:  1% of Gross Sales the first year. 2% of Gross Sales beginning the second year through the end of the term of the Franchise Agreement.

  • Due Date:  Monthly on the 15th.
  • All franchisees are members of the FASTSIGNS National Advertising Council, Inc. which administers the Ad Fund.
  • You may receive an annual rebate on the Ad Fee dependent upon achieving certain sales levels.
  • The reduction in the Ad Fee for the first year is not applicable for the sale of an existing FASTSIGNS Center to a third party.

8.  Initial Advertising and Promotional Materials:  $12,500 (new FASTSIGNS Center) and $8,500 (Conversion Franchise and Co-Brand Center)

  • Due Date:  Prior to training.
  • These monies fund initial marketing and advertising including web marketing (Pay-Per-Click ads), direct marketing (mailings to your area and materials to use and mail locally), telemarketing campaigns, and other programs during the first several months your Center is open.

9.  Initial Advertising and Promotional Materials for a Sale of an Existing FASTSIGNS Center to a Third Party Buyer:  $8,500

  • Due Date:  Upon signing of the Franchise Agreement.
  • These monies fund initial marketing and advertising including web marketing (Pay-Per-Click ads), direct marketing (mailings to your area and materials to use and mail locally), telemarketing campaigns, and other programs during the first several months as a principal.

8.  Interest:  lesser of 18% per annum or highest rate allowed by applicable law

  • Due Date:  On demand.
  • Interest may be charged on all overdue amounts.

9.  Non-Compliance Fee:  2.5% of Gross Sales

  • Due Date:  On demand, following your failure to cure a default.
  • If you are in default of your Franchise Agreement and you fail to timely cure the default, FASTSIGNS may, at its option, charge a noncompliance fee in the amount of 2% of Gross Sales payable to it in the same manner as the Service Fee, and a non-compliance fee in the amount of 0.5% of Gross Sales payable to the FASTSIGNS National Advertising Council, Inc. payable in the same manner as the Ad Fund contribution.
  • The Non-Compliance Fee will continue until the default is cured.

10.  Transfer Fee:  $17,500

  • Due Date:  Submitted with transfer agreement.
  • You may transfer your interest in the Franchise Agreement for a fee.

11.  Renewal Fee:  no more than 15% of then-current initial franchise fee

  • Due Date:  On signing renewal Franchise Agreement.
  • You must give FASTSIGNS at least 8 months’ notice; remodel décor as appropriate and upgrade equipment to current standards; and sign then-current Franchise Agreement.

12.  Indemnification:  varies according to loss

  • Due Date:  On demand.
  • You must indemnify FASTSIGNS when certain of your actions result in loss to it under the Agreements.

13.  Attorneys’ Fees and Costs, and Collection Agency Costs:  amount varies

  • Due Date:  When billed.
  • If FASTSIGNS incurs legal expenses or collection agency fees because of your breach of the Agreements, you must pay those expenses.

14.  Post-Termination and Expiration Expenses:  amount varies

  • Due Date:  When billed.
  • If you fail to make the necessary changes to distinguish the appearance of your Center premises from that of other FASTSIGNS Centers after the Franchise Agreement terminates or expires, FASTSIGNS may cause those changes to be made and charge you those expenses.

15.  Audit Fee:  cost of audit

  • Due Date:  When billed.
  • If you have understated any amount you owe to FASTSIGNS by more than 2%, you must pay the cost of the audit.

16.  Technology Fee:  will not exceed $200 per month

  • Due Date:  Monthly.
  • Currently, FASTSIGNS does not charge this fee. It reserves the right to charge this fee in the future. FASTSIGNS will provide you with 180 days’ prior notice before you begin paying this fee.

17.  Email Accounts:  $50 to $62

  • Due Date:  Annually.
  • FASTSIGNS provides you with 2 email accounts, and 1 outside sales professional email account, at no cost. You will be charged for each additional email account.

18.  Franchise Convention:  amount varies

  • Due Date:  As incurred.
  • You, your Managing Principal, or your General Manager must attend the franchise convention for all FASTSIGNS franchisees once every 3 years.
  • You are responsible for the registration fee and any and all expenses for you, your Managing Principal, or your General Manager.



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