Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

  • Anytime Fitness
  • CruiseOne
  • Firehouse Subs
  • Jimmy John's
  • Massage Envy
  • Menchie's
  • Orange Leaf Frozen Yogurt
  • Planet Fitness
  • The UPS Store
  • Yogurt Land
  • And Hundreds More...

No, thanks. I'm not interested in uncovering the actual earnings of hundreds of franchises at this time.

Considering a Nathan’s Famous Franchise? Don’t Overlook These 16 Important Franchise Fees

by Franchise Chatter on February 26, 2017

in Franchise Fees, Hot Dog Franchise



Franchise Chatter Membership Information

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

Nathan's Famous Photo by braesikalla

If you are considering a Nathan’s Famous franchise, don’t get blindsided by these 16 important franchise fees (from the initial franchise fee, to the royalty fee, to 14 other fees found in Items 5 and 6 of Nathan’s Famous’s 2016 FDD).

1.  Initial Franchise Fee:  $5,000 to $30,000



2.  Deposit Fee:  $5,000

  • When you sign the Franchise Agreement, you must pay Nathan’s Famous an initial franchise fee of $30,000 for a single Nathan’s Famous Restaurant.
  • If you sign a deposit agreement (“Deposit Agreement”), Nathan’s Famous will credit any deposit you pay it for the Deposit Agreement against the initial franchise fee.
  • Under the terms of the Deposit Agreement, you will pay Nathan’s Famous a deposit of $5,000, after which you will have 180 days to locate and secure a location for your franchised business.
  • Nathan’s Famous must approve both your proposed location and the lease before execution.
  • If you and Nathan’s Famous are unable to agree upon a location within 180 days after the effective date of the Deposit Agreement, the Deposit Agreement will terminate and, upon your written request, Nathan’s Famous will refund you the deposit, minus its reasonable expenses.
  • If you and Nathan’s Famous agree upon a location for the franchised business before termination of the Deposit Agreement, you will sign a Franchise Agreement and pay Nathan’s Famous the balance of the initial franchise fee.
  • Once you have signed the Franchise Agreement, no part of the initial franchise fee (including the deposit) is refundable.
  • Your deposit is a sign of your good faith and will be used to cover some of Nathan’s Famous’s costs if you do not sign a Franchise Agreement. The Deposit Agreement does not confer upon you any franchise or territorial rights.
  • If you will operate the Restaurant from a Kiosk, and sign a Kiosk Amendment, the initial franchise fee will be $5,000. Initial franchise fees must be paid in a lump sum and are not refundable.
  • If you will operate the Restaurant from a Mobile Unit, and sign a Mobile Unit Amendment, the initial franchise fee will be $15,000. Initial franchise fees must be paid in a lump sum and are not refundable.

3.  Area Development Agreement:  varies

  • When you sign the Area Development Agreement, you must pay Nathan’s Famous a development fee.
  • The amount of the development fee will vary under the circumstances and will be subject to mutual discussion and agreement, taking into account a number of factors. These factors include the number of Restaurants you choose to develop under the Area Development Agreement, the market in which you choose to develop, the economics and demographics of that market, and Nathan’s Famous’s determination as to the “value” of the Development Area to be granted under the Area Development Agreement as measured by factors such as the total number of potential Restaurants that Nathan’s Famous anticipates can be developed within the Development Area (regardless of the minimum number of Restaurants that you are required to develop, and market conditions at the time the Area Development Agreement is signed).
  • The development fee must be paid in lump sum and is non-refundable.

4.  Royalty:  5.5% of Gross Sales

  • Due Date:  Tenth day of each month on your Gross Sales for the prior month.
  • “Gross Sales” means all revenue from the sale of services and products and all other income related to the Franchised Business, except sales taxes.
  • Month means a four- or five-week period (or calendar month) that Nathan’s Famous designates.

5.  Marketing Development Fund:  2% of Gross Sales

  • Due Date:  Same as Royalty.
  • Nathan’s Famous may designate a different accounting period (for example, weekly) for calculating and paying marketing development sums.
  • If Nathan’s Famous establishes a Regional Fund, you must join that Regional Fund. However, you will not be required to contribute more than 2% of your Gross Sales between the Marketing Development Fund and any Regional Fund.

6.  Grand Opening Advertising:  varies

  • Due Date:  Varies.
  • You must conduct, at your expense, the grand opening promotional and advertising activities that Nathan’s Famous requires. This advertising expense will be credited against your required contribution to the Marketing Development Fund.

7.  Transfer:  $4,500 (for a Restaurant) or $1,125 (for a Branded Menu Program Operation), or 15% of then-current initial franchise fee, whichever is greater. Transfer fee for a Kiosk or Mobile Unit is $2,500.



  • Due Date:  On or before the date of the proposed transfer.
  • No fee is imposed for transfers to a corporation you form for the convenience of ownership.

8.  Audit by Nathan’s Famous:  cost of the audit

  • Due Date:  Upon request.
  • If Nathan’s Famous audits your records and finds that you understated amounts, or if you fail to submit the required weekly sales report, then among other things, Nathan’s Famous may require you to reimburse it for the costs of its audit (such as auditors’ fees).
  • Nathan’s Famous may take other remedies as well.

9.  Interest on Overdue Payments:  1.5% per month or maximum rate permitted by law, whichever is less

  • Due Date:  Upon request.
  • If you do not timely pay your Royalties or Marketing Development Fund contributions under a Franchise Agreement or Participation Agreement, Nathan’s Famous may require you to pay interest on the overdue amounts.

10.  Securities Offering:  Nathan’s Famous’s actual expenses, at least $7,500

  • Due Date:  Upon request.
  • If you propose to make an offering of any securities, you must reimburse Nathan’s Famous for its reasonable costs (including attorneys’ and accounting fees) in evaluating your proposed offering.

11.  Costs and Attorneys’ Fees:  will vary under circumstances

  • Due Date:  Upon request.
  • If you default under the Franchise Agreement, Participation Agreement, or Area Development Agreement, you must reimburse Nathan’s Famous for the expenses it incurs (such as attorneys’ fees) in enforcing or terminating the Agreement.

12.  Cost of Defense:  will vary under circumstances

  • Due Date:  Upon request.
  • If Nathan’s Famous determines that you have not used the proprietary Marks according to the Franchise Agreement, or if it determines that you have not used the AT Proprietary Marks according to the Participation Agreement, you must bear the cost of its defense of you against any third party claim, suit, or claim arising out of your use of the Proprietary Marks or the AT Proprietary Marks, including the cost of any judgment or settlement.

13.  Site Selection:  will vary under circumstances



  • Due Date:  Upon request.
  • If you are an Area Developer and ask that Nathan’s Famous conduct more than one on-site evaluation for each proposed Restaurant, you must reimburse Nathan’s Famous for its reasonable expenses in evaluating the additional site(s).

14.  Inspection and Product Testing Charge:  will not exceed reasonable cost of inspection and actual cost of test

  • Due Date:  Upon request.
  • If you ask Nathan’s Famous to consider a new supplier, it may incur certain costs, including testing the supplier’s facilities and products, and will ask you or the proposed supplier to reimburse Nathan’s Famous for those costs.

15.  Indemnification:  will vary under circumstances

  • Due Date:  Upon request.
  • You must reimburse Nathan’s Famous for the costs it incurs if it is sued, or held liable for claims, that arise from your operation of the Franchised Business, for all actions caused by your failure to comply with the Americans With Disabilities Act, for any offer of your securities, and for costs it incurs in defending claims that you used the Proprietary Marks in an unauthorized manner.

16.  Renewal fee:  One-half of the then-current initial franchise fee, or $15,000, whichever is more. There is no renewal fee for a Kiosk or Mobile Unit.

  • Due Date:  Before renewal.
  • You will only need to pay this fee if you renew the Franchise Agreement. There is no renewal under the Area Development Agreement.

Franchise Matching Quiz



Franchise Matching Quiz

{ 0 comments… add one now }

Leave a Comment

Previous post:

Next post: