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Considering a Famous Toastery Franchise? Don’t Overlook These 31 Important Franchise Fees

by Franchise Chatter on March 6, 2017

in Breakfast Franchise, Franchise Fees, Lunch Restaurant Franchise



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

If you are considering a Famous Toastery franchise, don’t get blindsided by these 31 important franchise fees (from the initial franchise fee, to the royalty fee, to 29 other fees found in Items 5 and 6 of Famous Toastery’s 2016 FDD).

1.  Initial Franchise Fee:  $40,000



  • You must pay Famous Toastery an initial franchise fee of $40,000 for the right to establish a single Famous Toastery Restaurant under a Franchise Agreement. You must pay the initial franchise fee in full when you sign the Franchise Agreement.
  • This fee is used in part for working capital and in part for profit.
  • The initial franchise fee is imposed uniformly on all franchisees and is not refundable under any circumstances.

2.  Opening Assistance Fee:  $25,000

  • In addition to the initial franchise fee, you must pay Famous Toastery $25,000 for its four person team of representatives to provide opening assistance. One-half of the amount ($12,500) is payable when Famous Toastery’s team is scheduled to provide opening assistance, and the balance of $12,500 will be billed to you and must be paid within 30 days after your Restaurant opens. This is not refundable.
  • If you enter into a Multi-Unit Operation Agreement and Famous Toastery determines that you do not need on-site opening assistance any time after your second Restaurant opens, then you will no longer pay Famous Toastery the operating assistance fee and it will not provide you with such assistance.

3.  Development Fee:  100% of the initial franchise fee ($40,000) for the first Restaurant to be developed, plus 50% of the initial franchise fee for each additional Restaurant you commit to develop under the Multi-Unit Operator Agreement

  • If you qualify to develop and operate multiple Famous Toastery Restaurants, then you will pay to Famous Toastery a development fee equal to the sum of:  (a) 100% of the initial franchise fee ($40,000) for the first Restaurant to be developed, and (b) 50% of the initial franchise fee for each additional Restaurant you commit to develop under the Multi-Unit Operator Agreement.
  • For example, if you commit to develop 2 Restaurants, the development fee is $60,000 ($40,000 plus $20,000), and is $120,000 for 5 Restaurants ($40,000 plus (4 x $20,000 = $80,000)).
  • The development fee is imposed uniformly on all multi-unit operators, is fully earned by Famous Toastery when received, and is not refundable.
  • When you sign the Franchise Agreement for the first Restaurant to be developed, which Famous Toastery expects will be signed at the same time the Multi-Unit Operator Agreement is signed, Famous Toastery will apply a portion of the development fee to pay the initial franchise fee for the first Restaurant in full.
  • For each additional Restaurant you will develop under the Multi-Unit Operator Agreement, Famous Toastery will apply a pro rata portion of the development fee toward the initial franchise fee, and the balance of the initial franchise fee, or $17,500, is payable in a lump sum when you sign the Franchise Agreement for that Restaurant or when you sign the lease for that Restaurant, whichever occurs first.

4.  Royalty Fee:  5.5% of Gross Sales

  • Due Date:  Payable weekly on Wednesday (unless Wednesday is not a business day, then it is due on the next business day).
  • Royalty Fees are calculated based on Gross Sales for the previous week ending Sunday.
  • Amounts due will be withdrawn by EFT from your designated bank account.

5.  Brand Development Fee:  up to 1% of Gross Sales

  • Due Date:  Payable together with the Royalty Fee.
  • With prior written notice to you, Famous Toastery may increase the Brand Development Fee to 1% of Gross Sales.
  • Amounts due will be withdrawn by EFT from your designated bank account.

6.  Local Marketing:  1% of Gross Sales

  • Due Date:  Must be spent monthly.
  • Payable to your local marketing suppliers.
  • Any marketing you wish to use must first be approved by Famous Toastery.

7.  Cooperative Marketing:  as determined by the members. Famous Toastery estimates that the required contribution will be between 1.5% and 3% of Gross Sales, but not more than 3%.



  • Due Date:  As determined by the members.
  • If a marketing cooperative is formed for your area, you must join the cooperative. Any money you contribute to a cooperative will count toward your local marketing requirement.

8.  Initial Training (for New or Replacement Employees):  Famous Toastery’s then-current per person training fee, plus expenses. Current per person training fee = $2,000.

  • Due Date:  Before training.
  • Famous Toastery will train up to four people at no additional charge. If you request that Famous Toastery provide its initial training program to any additional employees, or to new or replacement employees during the term of your Franchise Agreement, you must pay Famous Toastery’s training fee as well as the trainees’ expenses, including travel, lodging, meals, and wages.

9.  Additional On-Site Training:  Famous Toastery’s then-current per diem rate per trainer, plus expenses. Current per diem rate = $300.

  • Due Date:  When billed.
  • If you request that Famous Toastery provide additional training at your Restaurant, you must pay its daily fee for each trainer it sends to your Restaurant, and you must reimburse each trainer’s expenses, including travel, lodging, and meals.

10.  Relocation Fee:  30% of Famous Toastery’s then-current initial franchise fee

  • Due Date:  Upon approval of your relocation request.
  • If you wish to relocate your Restaurant.

11.  Insufficient Funds Fee:  $100

  • Due Date:  On demand, if incurred.
  • Payable if there are insufficient funds in your account to pay fees due to Famous Toastery. If you incur three insufficient funds fees in any 12 month period, Famous Toastery has the right to terminate your Franchise Agreement.

12.  Interest:  18% per annum or the highest interest rate allowed by applicable law (whichever is greater)

  • Due Date:  On demand.
  • Interest may be charged on all overdue amounts. Interest accrues from the original due date until payment is received in full.

13.  Audit Fee:  cost of audit (estimated to be between $1,000 and $5,000)



  • Due Date:  When billed.
  • Payable only if Famous Toastery finds, after an audit, that you have understated any amount you owe to it, or Gross Sales, by 2% or more. You must also pay the understated amount plus interest.

14.  Prohibited Product or Service Fine:  $250 per day of use of unauthorized products or services

  • Due Date:  If incurred.
  • In addition to other remedies available to Famous Toastery.

15.  Transfer Fee (Franchise Agreement):  60% of Famous Toastery’s then-current initial franchise fee, if the transfer is to a new franchisee for the System; 40% of Famous Toastery’s then-current initial franchise fee if the transfer is to an existing franchisee in the System

  • Due Date:  Upon completion of the transfer.
  • No fee charged for a one time transfer from individual(s) to a corporate entity formed for convenience of ownership of the franchise.

16.  Transfer Fee (Multi-Unit Operator Agreement):  $20,000

  • Due Date:  Upon completion of the transfer.
  • No fee charged for a one time transfer from individual(s) to a corporate entity formed for convenience of ownership of the franchise.

17.  Renewal Fee:  $3,000

  • Due Date:  Upon renewal of the Franchise Agreement.
  • You will only need to pay this fee if you renew the Franchise Agreement. There is no renewal under the Multi-Unit Operator Agreement.

18.  Inspection and Testing:  reimbursement of Famous Toastery’s costs (but not more than $1,000)

  • Due Date:  On demand.
  • Payable if you request that Famous Toastery evaluate a product or supplier that it has not previously approved and that you want to use for your Restaurant. Also payable if Famous Toastery determines that your Restaurant is offering items that do not conform to its specifications.

19.  Liquidated Damages:  will vary under circumstances

  • Due Date:  On demand.

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

  • Due Date:  On demand.
  • If you default under your agreement, you must reimburse Famous Toastery for the expenses it incurs (such as attorneys’ fees) in enforcing or terminating the agreement.

21.  Indemnification:  will vary under circumstances

  • Due Date:  On demand.
  • You must reimburse Famous Toastery for the costs it incurs if it is sued or held liable for claims that arise from your operation of the Franchised Business or for costs associated with defending claims that you used the trademarks in an unauthorized manner.

22.  Repair, Maintenance, and Remodeling/Redecorating:  will vary under circumstances

  • Due Date:  As incurred.
  • Payable to approved suppliers.
  • You must regularly clean and maintain your Restaurant and its equipment.
  • Famous Toastery may require you to remodel or redecorate your Restaurant to meet its then-current image for all Famous Toastery Restaurants. Famous Toastery will not require you to remodel or redecorate your Restaurant more frequently than every five years.

23.  Charges for “Mystery Shopper” Quality Control Evaluation:  up to $150

  • Due Date:  Monthly.
  • The mystery shopper program will be separate from Famous Toastery’s programs for customer surveys and customer satisfaction audits (which may require you to accept coupons from participating customers for discounted or complimentary items).

24.  Gift Cards/Loyalty Cards:  to be determined

  • Due Date:  To be determined.
  • Famous Toastery may establish a loyalty or gift card program. If so, you will be required to honor the gift card, regardless of whether it was authorized by you.
  • You shall sell, issue, or redeem gift cards without any offset from Royalties or other fees owed to Famous Toastery.

25.  ServSafe/TIPS (or Similar) Certification:  $150 per person or the then-current market rate

  • Due Date:  As needed.
  • Each of your managers and other employees Famous Toastery designates must be ServSafe and/or TIPS or similarly certified. Payable to an approved supplier.

26.  Insurance Premiums:  reimbursement of Famous Toastery’s costs, plus 10% administrative fee

  • Due Date:  On demand.
  • If you do not maintain the required insurance coverages, Famous Toastery has the right (but not the
    obligation) to obtain insurance on your behalf.

27.  Management Fee:  10% of Gross Sales, plus expenses

  • Due Date:  If incurred.
  • Famous Toastery may step in and manage your Restaurant in certain circumstances, such as death, disability, or prolonged absence. Famous Toastery will charge a management fee if it manages your Restaurant, and you must reimburse its expenses.

28.  Point of Sale System Maintenance:  $75 to $125

  • Due Date:  Monthly.
  • Payable to approved supplier.
  • You must have a maintenance and support contract for your point of sale system.

29.  Quality Assurance Audits:  to be determined

  • Due Date:  To be determined.
  • Famous Toastery reserves the right to contract with a quality assurance auditing company to inspect your Restaurant to make sure you are operating according to its specifications. May be payable to Famous Toastery as a reimbursement or directly to the approved supplier.

30.  Health and Safety Inspection:  $500 to $700

  • Due Date:  As incurred.
  • Famous Toastery may designate a third party to conduct health and safety inspections at your Restaurant. Payable to the approved supplier.

31.  Compliance with Systems/Manual Changes:  to be determined

  • Due Date:  To be determined.
  • To maintain the competitive nature of the System, Famous Toastery reserves the right to make changes to the System or Manuals. You will be required to comply with those changes, at your sole expense.
  • Although no changes are currently contemplated, expenses for changes may be payable to Famous Toastery, its affiliate, or a third party.

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