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Considering a Wow 1 Day Painting Franchise? Don’t Overlook These 17 Important Franchise Fees

by Franchise Chatter on April 26, 2017

in Franchise Fees, Painting Franchise

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

If you are considering a Wow 1 Day Painting franchise, don’t get blindsided by these 17 important franchise fees (from the initial franchise fee, to the royalty fee, to 15 other fees found in Items 5 and 6 of Wow 1 Day Painting’s 2017 FDD).

1.  Initial Franchise Fee:  $50,000

  • The initial franchise fee is a minimum of $50,000, which includes $20,000 for the first subterritory, plus $10,000 for each of the three additional subterritories. The minimum initial investment is a territory consisting of four subterritories.
  • The initial franchise fee of $20,000 for the first subterritory is payable to Wow 1 Day Painting in a lump sum when you sign the Franchise Agreement. The fee for additional territories is payable to Wow 1 Day Painting on the due date mutually agreed upon and set forth in the Franchise Agreement.
  • These fees are not refundable. Except as noted herein, each portion of the initial franchise fee is fully earned upon receipt.
  • The range of initial franchise fees payable for Franchise Agreements signed in the year ending December 31, 2016 was between $0 and $55,000.
  • If you are granted multiple subterritories within which to operate the Franchised Business, Wow 1 Day Painting may (in its sole discretion) allow you to pay the initial franchise fee with respect to some of the subterritories in equal monthly installments for a period not to exceed one year.
  • Wow 1 Day Painting may not allow you to operate or service customers in any such subterritories until you pay the initial fees for those subterritories in full.

2.  Royalty:  6% of Gross Revenue

  • Due Date:  Semi-monthly on the third business day after the 15th and last day of each month.
  • Paid by electronic fund transfer.

3.  Minimum Royalty:  depending upon your year of operation, the Minimum Royalty will range from $1,500 to $3,900 per subterritory. The amount payable by you is the amount the Minimum Royalty exceeds the amount of Royalties actually paid by you in any year of operations.

  • Due Date:  On or before January 15th each year.
  • This is only payable if the Royalties actually paid by you in a year of operations are less than the Minimum Royalty.

4.  Sales Center Fee:  3% of Gross Revenue

  • Due Date:  Same as Royalty.
  • This money goes into the Sales Center Cooperative Fund which pays the expenses of the Sales Center, web based booking system, and Intranet.
  • Wow 1 Day Painting Corporate manages the Sales Center on behalf of its franchisees.
  • Paid by electronic fund transfer.

5.  Customer Relationship Management (CRM) Fee:  Dispatch License – $65 per user, per month; Standard Licenses:  $20 per user, per month; Google Licenses – $5 per month for additional

  • Due Date:  Within 30 business days of billing by Wow 1 Day Painting.
  • This money is used to purchase licenses from third-party CRM software providers. The amounts shown here are what Wow 1 Day Painting’s vendors currently charge and are subject to change at any time. Wow 1 Day Painting does not add a charge to this fee and only passes through what its vendors charge it.

6.  Marketing Fund:  2% of Gross Revenue

  • Due Date:  Same as Royalty.
  • This money goes into an Advertising/Promotions (Marketing) Fund which Wow 1 Day Painting uses for regional and national advertising.
  • Paid by electronic fund transfer.

7.  Branding Cooperative:  up to 3% of Gross Revenue in aggregate

  • Due Date:  As determined by Wow 1 Day Painting.
  • Only imposed if Wow 1 Day Painting authorizes franchisees in a particular area to establish a branding cooperative and 75% of the involved franchisees (calculated on a Gross Revenue basis) subject to the branding cooperative consent to paying fees.
  • This is paid as directed by Wow 1 Day Painting.
  • These amounts may be credited towards Local Marketing obligations.
  • Any franchisor-owned outlets in an area subject to a branding cooperative will pay into and vote in the same manner as franchised outlets.
  • You will not be required to contribute more than 3% of your Gross Revenue in the aggregate for all branding cooperatives to which you belong.

8.  Advertising Materials:  $800 to $3,500

  • Due Date:  As incurred.
  • Occasionally, Wow 1 Day Painting will purchase advertising materials in bulk on behalf of the franchisees. When this happens, each franchisee will be required to purchase these advertising materials directly from Wow 1 Day Painting, usually at its cost.
  • You may have additional local marketing obligations over and above the purchase of such materials.

9.  Additional Training:  payment for additional training or retraining at up to $500 per person per day for up to possibly 10 days

  • Due Date:  Within 30 business days of billing by franchisor.
  • There is no separate charge for initial training or for the training of one additional employee.
  • The costs of transportation, accommodations, meals, and living expenses associated with additional training, for which you are responsible, are not disclosed since they will vary greatly depending upon the timing of the training and your location in relation to Vancouver, BC, the site of training.

10.  Transfer:  $10,000, unless the transfer is to a franchisee-controlled entity

  • Due Date:  You are required to pay $2,500 upon announcing your intention to sell, and the balance upon transfer.
  • No charge if transferred to an entity you control.

11.  Renewal Fee:  $5,000

  • Due Date:  Within 3 months before expiration of current term.
  • This fee is partly intended to defray legal and administrative costs incurred by Wow 1 Day Painting when you renew your Franchise Agreement.

12.  Audit Expenses:  costs of examination or audit (approximately $1,500 to $5,000, but may be more), plus any deficiency in amounts that should have been paid to Wow 1 Day Painting

  • Due Date:  Upon demand.
  • Audit costs are payable only if the audit reveals a material deficiency on your part, whether monetary or otherwise.

13.  Interest on Late Payments:  lower of 24% per annum or the highest amount allowed under applicable law

  • Due Date:  Upon demand.
  • Payable on all overdue amounts accruing from the date payment is due until payment is received by Wow 1 Day Painting.

14.  Annual Conference:  $1,500 to $2,000, plus costs associated with attendance

  • Due Date:  As incurred.
  • This fee is intended to reimburse Wow 1 Day Painting for the cost of holding annual conference. This will generally include hotel and some meals and will generally not include travel, entertainment, and salaries.
  • You must send attendees for each Franchised Business.

15.  Management Assistance:  $450 per day, plus out-of-pocket expenses

  • Due Date:  Within 7 days of invoice.
  • Payable if Wow 1 Day Painting exercises its right to run your Franchised Business.

16.  Liquidated Damages:  $25 to $2,000, depending upon the breach

  • Due Date:  Upon demand.
  • Payable if Wow 1 Day Painting determines that you have contravened a standard set out in the Franchise Agreement or Operations Manual.
  • Amount of damages depends upon the nature of the violation.

17:  Indemnity:  depends upon the size of the loss for which you are required to indemnify Wow 1 Day Painting

  • Due Date:  Upon demand.
  • You must indemnify Wow 1 Day Painting for losses incurred by it that arise out of your operation of the Franchised Business.

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