If you are considering a Buffalo Wild Wings franchise, don’t get blindsided by these 23 important franchise fees (from the initial franchise fee, to the royalty fee, to 21 other fees found in Items 5 and 6 of Buffalo Wild Wings’ 2017 FDD).
1. Application Fee: $3,000
- When Buffalo Wild Wings has made a preliminary determination that you meet its financial qualifications, you pay an Application Fee of $3,000. This fee is nonrefundable.
- If you sign a Franchise Agreement, the Application Fee is credited toward the Initial Franchise Fee.
2. Initial Franchise Fee: $25,000 to $40,000
- You pay an Initial Franchise Fee of $40,000 when you sign a Franchise Agreement.
- If you already operate one or more Franchised Restaurants, and Buffalo Wild Wings determines that you are capable of conducting your own pre-opening staff training related to additional Restaurants that you develop, you pay a reduced Initial Franchise Fee of $25,000 for each such additional Restaurant.
- The reduction of the Initial Franchise Fee by $15,000 in this instance equals a portion of the approximate costs Buffalo Wild Wings will save by you conducting your own pre-opening staff training. The other portion of these costs is reflected in the Opening Team Expenses, described further below.
- Further, if you open a Restaurant with a trade area wholly within the Designated Area of another Restaurant you own, the Initial Franchise Fee is waived except for costs incurred by Buffalo Wild Wings in assisting with the store opening.
- You pay Buffalo Wild Wings $5,000 toward the Initial Franchise Fee when you sign a Reservation Agreement and the balance of the Initial Franchise Fee when you sign the Franchise Agreement.
- The $5,000 is not refundable even if you do not sign a Franchise Agreement within the six-month term of the Reservation Agreement, unless Buffalo Wild Wings determines that the reserved trade area is no longer viable or if Buffalo Wild Wings determines, in its sole judgment, that circumstances beyond your control prevented you from securing a site during the six-month term.
- If you do not sign a Reservation Agreement, you pay Buffalo Wild Wings the full Initial Franchise Fee due when you sign the Franchise Agreement (less the Application Fee).
- The Initial Franchise Fee (including amounts paid toward a Reservation Agreement) is a lump sum payment fully earned upon receipt and is not refundable.
- Buffalo Wild Wings will use the Initial Franchise Fee in part to cover the direct and indirect costs associated with you purchasing and opening a Restaurant including training, manuals, opening assistance, legal fees, and general overhead.
- During its last fiscal year, Buffalo Wild Wings received from franchisees a range of $0 to $40,000 for the Initial Franchise Fees described here. Those franchisees who paid less than the current Initial Franchise Fee of $40,000 signed earlier agreements with differing franchise fee requirements or had other special considerations.
- Except as described above, the Initial Franchise Fee is uniform for all new franchisees.
3. Development Fee: one half of the Initial Franchise Fee for each Franchised Restaurant to be opened under the Area Development Agreement
- If you sign an Area Development Agreement, you must develop a minimum of two Franchised Restaurants within the Development Territory.
- The Initial Franchise Fee for each Restaurant is $40,000, unless Buffalo Wild Wings determines that you are capable of, and in fact conduct your own pre-opening staff training related to the additional Restaurants you develop, in which case the Initial Franchise Fee for each such Restaurant after your first is $25,000.
- Upon signing the Area Development Agreement, you pay a lump sum, nonrefundable Development Fee equal to one half of the Initial Franchise Fee for each Franchised Restaurant to be opened under the Area Development Agreement.
- The Development Fee is applied to the Initial Franchise Fee for each Restaurant opened under the Area Development Agreement, so that upon signing the required individual Franchise Agreement for a Restaurant, you must submit the balance of the Initial Franchise Fee for that Restaurant.
- The Initial Franchise Fees for Restaurants opened under an Area Development Agreement are nonrefundable.
4. Opening Team Expenses: generally range from $9,000 to $12,000
- You will reimburse Buffalo Wild Wings for the remaining portion of the travel expenses and prorated salaries for the Opening Team members who assist you with the opening of your Restaurant. (The first portion — $15,000 — is described above in Number 2).
- The Opening Team Expenses generally range from $9,000 to $12,000, are nonrefundable, and will be paid within 10 days after receipt of an invoice from Buffalo Wild Wings. You will receive an invoice for the Opening Team’s travel expenses and prorated salaries within 30 days after the opening of your Restaurant.
- If your opening is delayed, you will pay all costs associated with rescheduling the Opening Team, including airfare and related travel charges. Thus, your Opening Team Expenses may be higher than the stated range if you reschedule the pre-opening training.
- If you are capable of conducting, and in fact do conduct your own pre-opening staff training prior to opening Restaurants after your first, you will not pay the Opening Team Expenses.
5. Royalty Fee: 5% of Gross Sales
- Due Date: Paid by electronic funds transfer every Friday for the preceding Reporting Period.
- Gross Sales includes the total revenues and receipts from the sale of all products, services, and merchandise sold in or in relation to your Restaurant, including, without limitation, any cover charges or fees, any vending or similar activities in your Restaurant or on its premises, catering, delivery, and other off-site activities and events, and all use or license fees. Gross Sales does not include sales tax.
- The Royalty Fee for the first half of the initial term of the Franchise Agreement will be an amount equal to 5% of Gross Sales. The Royalty Fee for the second half of the initial term of the Franchise Agreement will be an amount equal to the greater of (i) 5% of Gross Sales or (ii) the Royalty Fee being charged by Buffalo Wild Wings under its form of Franchise Agreement being used by it at any time during the second half of the initial term (or, if no form of Franchise Agreement is being used by it on such date, the Royalty Fee being charged by it under its latest form of Franchise Agreement), provided that the Royalty Fee may not be increased by more than 1/2% at any time during the initial term of the Agreement.
- The amount of the Royalty Fee for any renewal term will be that provided in the Franchise Agreement executed for such renewal term.
- Reporting Period means the period from Monday to Sunday (unless Buffalo Wild Wings designates otherwise).
- If there are insufficient funds from which to pay the fee when due, the amount due will bear interest at the highest applicable legal rate, up to a maximum of 1 1/2% per month from the date due.
6. Advertising Fee: 3.15% of Gross Sales
- Due Date: Paid by electronic funds transfer every Friday for the preceding Reporting Period.
- Buffalo Wild Wings will contribute the same amount for each similarly situated company or affiliate-owned Restaurant in the same local marketing area (except “Special Sites”).
7. Local Advertising: 1/2% of Gross Sales
- Due Date: Periodically.
- If Buffalo Wild Wings designates a local advertising cooperative, your local advertising expenditure can be used for the cooperative advertising contribution.
8. Grand Opening Advertising/Marketing: $12,500
- Due Date: Paid between 45 days prior to and 45 days after opening your Restaurant.
- You must perform a grand opening if you relocate the Restaurant or reopen the Restaurant after having it closed for 30 days or more.
9. Audits: cost of audit, plus interest at the maximum rate allowable by law (not to exceed 1 1/2% per month)
- Due Date: Immediately upon receipt of bill.
- You pay for cost of audit only if it shows an understatement of your Gross Sales, Royalty Fees, or Advertising Fees by 1.25% or more from data reported to Buffalo Wild Wings.
10. Transfer Fee: $12,500
- Due Date: Upon application for consent to transfer.
- You must pay a $5,000 deposit at the time you submit the transfer application. Buffalo Wild Wings has the right to increase the deposit above $5,000, and up to $12,500, if it believes its costs and expenses will exceed $5,000.
- Buffalo Wild Wings will refund the $5,000 (or any increased deposit amount), less its costs and expenses (including its time), if the transfer is not completed. If the transfer proceeds, the $7,500 balance is due to Buffalo Wild Wings prior to closing of the transfer and the entire $12,500 transfer fee becomes nonrefundable at that time.
11. Computer Hardware Maintenance: $1,500 to $2,500
- Due Date: Annually.
- Payable to vendor of the hardware, which may be Buffalo Wild Wings or an affiliate.
12. Computer Software Maintenance: varies
- Due Date: Annually.
- Payable to vendor, which may be Buffalo Wild Wings or an affiliate.
13. POS Hosting Services: $6,000 to $8,000
- Due Date: Annually.
- Payable to vendor, which may be Buffalo Wild Wings or an affiliate.
14. Remodeling: $450,000 to $750,000
- Due Date: As remodeling occurs.
- Remodeling does not include general maintenance, routine maintenance, painting, replacing worn carpet, replacing worn furniture, and refreshing.
15. Co-op Accounting Fee: $1,200 to $6,000
- Due Date: Annually.
16. Renewal Fee: $20,000
- Due Date: 30 days prior to the end of the expiring term
17. Late Fee: $150 for each delinquent report or payment
- Due Date: Automatically upon next electronic transfer of funds.
18. Additional Assistance: $1,000 per day per person, plus expenses
- Due Date: Immediately upon receipt of bill.
19. Commercial Insurance: $24,000 to $110,000 for annual premiums
- Due Date: When premiums are due.
20. Mystery Shopper: $100 to $250 per shop
- Due Date: Upon receipt of bill.
21. Liquidated Damages: varies
- Due Date: Payable if you violate non-solicitation covenant in the Franchise Agreement or within 30 days of the termination of the Area Development Agreement, whichever is applicable.
22. Menu Database Support: $420 to $600 annually (per Restaurant)
- Due Date: Immediately upon receipt of bill.
23. General POS Support Services: currently estimated to be $105 to $165 or more annually (per Restaurant)
- Due Date: Immediately upon receipt of bill.
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