Considering a Buffalo Wild Wings Franchise? Don’t Overlook These 22 Important Franchise Fees

Updated November 15, 2020

If you are considering a Buffalo Wild Wings franchise, don’t get blindsided by these 22 important franchise fees (from the initial franchise fee, to the royalty fee, to 20 other fees found in Items 5 and 6 of Buffalo Wild Wings’ 2020 FDD).

1.  Initial Franchise Fee:  $10,000

• You pay Buffalo Wild Wings an initial franchise fee when you sign the Franchise Agreement. If you are signing the Franchise Agreement that is not covered by an Area Development Agreement, then you must pay Buffalo Wild Wings a $10,000 initial franchise fee when you sign the Franchise Agreement.

• Buffalo Wild Wings will use the initial franchise fees in part to cover some of its costs associated with your opening a Buffalo Wild Wings Sports Bar, including opening assistance, legal fees, and general overhead. The initial franchise fees are uniform and not refundable under any circumstance.

2.  Training Fee:  $15,000

• You also must pay Buffalo Wild Wings a uniform, nonrefundable training fee of $15,000 on the date you sign the Franchise Agreement to compensate Buffalo Wild Wings (in part) for providing the on-site training at the Sports Bar from its “Opening Team.”

3.  Opening Team’s Expenses:  $5,000 to $15,000

• You also must reimburse Buffalo Wild Wings for the travel expenses and prorated salaries for the Opening Team members who provide you training.

• Buffalo Wild Wings will send you an invoice within 30 days after the Sports Bar’s opening date, and you must pay the invoice within 10 days after receiving it.

• Buffalo Wild Wings anticipates your nonrefundable payment for the Opening Team’s expenses will range from $5,000 to $15,000.

• However, if Buffalo Wild Wings determines (in its sole judgement) when signing the Franchise Agreement, based on operations at your (or your affiliate’s) other Buffalo Wild Wings Sports Bars, that you are capable of training your own staff before your Sports Bar opens, then (1) you need not pay Buffalo Wild Wings the training fee or Opening Team expenses, (2) Buffalo Wild Wings will not provide the Opening Team for your Sports Bar, and (3) you must provide opening training to your Sports Bar staff according to Buffalo Wild Wings’ requirements.

4.  Development Fee:  $10,000 multiplied by the number of Buffalo Wild Wings Sports Bars you agree to develop on the Development Schedule

• If you sign an Area Development Agreement, you must develop a minimum of one Buffalo Wild Wings Sports Bar within the Development Territory. The development fee is $10,000 multiplied by the number of Buffalo Wild Wings Sports Bars you agree to develop on the Development Schedule.

• The development fee is consideration for Buffalo Wild Wings signing the Area Development Agreement and not consideration for any Franchise Agreement, is based on a uniform calculation, and is not refundable under any circumstances.

• However, Buffalo Wild Wings will credit $10,000 of the development fee towards the initial franchise fee payable under Franchise Agreements that you and your Developer Subsidiaries sign for Buffalo Wild Wings Sports Bars operating in the Development Territory.

5.  Royalty Fee:  5% of Gross Sales, subject to Development Incentive

• Due Date:  Paid by electronic funds transfer every Friday for the preceding Reporting Period.

• The “Reporting Period” means the period from Monday to Sunday, although Buffalo Wild Wings may periodically change the Reporting Period.

6.  Advertising Fee:  3.25% of Gross Sales

• Due Date:  Paid by electronic funds transfer every Friday for the preceding Reporting Period.

• Buffalo Wild Wings will contribute at the same rate for each similarly situated company- or affiliate-owned Buffalo Wild Wings Sports Bars in the same local marketing area (except Special Sites).

7.  Audit Costs:  cost of audit

• Due Date:  Immediately upon receipt of bill.

• You pay the cost of the audit and further audits for 3 years only if it shows an understatement of your Gross Sales, Royalty Fees, or Advertising Fees in any month of 1.25% or more from data reported to Buffalo Wild Wings.

8.  Learning Management System Fee:  currently $59.22 plus tax per Sports Bar per year, but may change depending on number of Buffalo Wild Wings Sports Bars participating

• Due Date:  Annually.

• You must participate in the Cornerstone Learning Management System to access certain training materials, knowledge checks, and certification exams.

• Buffalo Wild Wings forwards the payment to Cornerstone, its vendor for the system.

9.  Transfer Fee:  $12,500

• Due Date:  Upon application for consent to transfer.

10.  Co-op or Local Marketing Group (LMG) Contribution:  at least ½% of Gross Sales

• Due Date:  Monthly.

11.  Co-op or LMG Accounting Fee:  $1,200 to $6,000 per year for the entire co-op or LMG

• Due Date:  Annually.

12.  Renewal Fee:  $20,000

• Due Date:  Upon signing renewal Franchise Agreement.

13.  Interest and Late Fee:  18% per annum or the maximum rate allowed by law, whichever is less, plus $150 for each delinquent report or payment

• Due Date:  Automatically upon next electronic funds transfer.

14.  Supplier Evaluation Costs:  actual costs of the inspection and evaluation

• Due Date:  As incurred.

• Due if you request Buffalo Wild Wings’ approval of a new product, service, or supplier.

15.  Commercial Insurance Costs:  $30,000 to $120,000 for annual premiums, plus Buffalo Wild Wings’ costs and fees

• Due Date:  When premiums are due.

• Only payable to Buffalo Wild Wings if you fail to maintain insurance and Buffalo Wild Wings (at its option) elects to obtain coverage for you.

16.  Indemnification:  will vary with the circumstances

• Due Date:  On demand.

• You must reimburse Buffalo Wild Wings for claims and liabilities relating to your Sports Bar’s development or operation or breach of the Franchise Agreement.

17.  Relocation Costs:  Buffalo Wild Wings’ reasonable costs relating to your relocation

• Due Date:  As incurred.

• Due only if you relocate the Sports Bar.

18.  Attorneys’ Fees:  will vary with the circumstances

• Due Date:  As incurred.

• You must reimburse Buffalo Wild Wings for its reasonable attorneys’ fees and costs if it prevails in a dispute.

19.  De-identification Costs:  will vary with the circumstances

• Due Date:  As incurred.

• If you fail to de-identify the Sports Bar when the Franchise Agreement terminates or expires, and Buffalo Wild Wings chooses to do so, you must reimburse Buffalo Wild Wings’ costs.

20.  Liquidated Damages Under Area Development Agreement:  balance of the initial franchise fee plus $50,000 for each undeveloped Buffalo Wild Wings Sports Bar

• Due Date:  Payable within 30 days after the termination of the Development Agreement.

• Payable if the Area Development Agreement terminates before you develop all required Buffalo Wild Wings Sports Bars.

21.  Menu Database Support:  $420 to $600 annually (per Sports Bar)

• Due Date:  Immediately upon receipt of bill.

22.  General POS Support Services:  currently estimated to be $1,050 to $1,650 or more annually (per Sports Bar)

• Due Date:  Immediately upon receipt of bill.