If you are considering a Wild Birds Unlimited franchise, don’t get blindsided by these 24 important franchise fees (from the initial franchise fee, to the royalty fee, to 22 other fees found in Items 5 and 6 of Wild Birds Unlimited’s 2017 FDD).
1. Initial Franchise Fee: $15,000 to $30,000
- If you are opening your first Wild Birds Unlimited franchise, you must pay an Initial Franchise Fee of $30,000.
- You pay Wild Birds Unlimited $6,000 when you sign a Reservation Agreement and the balance of $24,000 when you sign the Franchise Agreement. The $6,000 is not refundable even if you do not sign a Franchise Agreement within the 6-month term of the Reservation Agreement.
- If you do not sign a Reservation Agreement, you pay Wild Birds Unlimited $30,000 when you sign the Franchise Agreement.
- If you are required to sign a renewal of the Reservation Agreement, you are required to pay Wild Birds Unlimited an additional $6,000 at the time that you sign the Renewal Reservation Agreement, which will be credited against the balance of the Initial Franchise Fee then owed to Wild Birds Unlimited.
- If you currently own a Wild Birds Unlimited franchise and you purchase a franchise for an additional Store, the Initial Franchise Fee for the additional franchise will be one-half of the Initial Franchise Fee then being offered by Wild Birds Unlimited to new franchisees (currently, $15,000).
- If you currently own a franchise and you are granted an option to purchase a franchise for an additional Store, you must sign the Reservation Agreement and pay to Wild Birds Unlimited a fee of $3,000 to receive the 6-month reservation period.
- That $3,000 is applied toward the Initial Franchise Fee for the additional Store. If you do not sign an additional Franchise Agreement within the 6-month term of the Reservation Agreement, it will expire and Wild Birds Unlimited does not refund the $3,000.
- Upon signing the Franchise Agreement for an additional Store, you will sign an Initial Franchise Fee Amendment, and you must pay Wild Birds Unlimited an additional fee of $3,000.
- The remaining $9,000 of the Initial Franchise Fee for an additional Store is paid in ten monthly payments of $900, beginning in the second month of operating your additional Store.
- If you are purchasing an existing Wild Birds Unlimited franchise, you do not pay an Initial Franchise Fee, but you will be required to pay an Assignment Fee equal to 50% of the current Initial Franchise Fee (currently, $15,000).
- Wild Birds Unlimited participates in the Veterans Transition Franchise Initiative (commonly referred to as “VetFran”) which seeks to provide opportunities for veterans who want to be in business. If you are a veteran of the U.S. Armed Forces, you may be eligible to receive a 15% discount off the Initial Franchise Fee.
2. Training Fee: $5,000
- In addition to the Initial Franchise Fee, you also must pay Wild Birds Unlimited $5,000 per Store to participate in its training program. You also must pay for your travel, lodging, and food expenses while attending training.
- If you own an existing franchise and are opening additional franchises, you must attend Wild Birds Unlimited’s training program if it has been more than 18 months since you attended the training program. You are not required to pay Wild Birds Unlimited the $5,000 training fee; however, you must pay for your travel, lodging, and food expenses.
3. Annual Conference Fee: $500
- You are also required to attend the Annual Conference during your first year as a franchisee and pay the Annual Conference fee upon signing your Franchise Agreement regardless of whether you attend. The Annual Conference fee is currently $500.
- If you are renewing your existing Franchise Agreement, you are required to attend the Annual Conference during the first year of your renewal term.
4. Gift Card Fee: $108 per Store
- Additionally, you must participate in the Gift Card Program and pay to Wild Birds Unlimited a fee as described in the next paragraph (the “Gift Card Fee”).
- If you purchase franchise rights to a new Store, you must pay to Wild Birds Unlimited a Gift Card Fee of $108 per Store, which covers the cost of gift cards/presenters/envelopes and a display. Included in the applicable Gift Card Fee is an administration fee, which you will pay to Wild Birds Unlimited, equal to $.05 to $.50 per gift card sold (“Gift Card Service Fee”).
5. Cost of Site Visit to Install and Train You in the Use of the Software, etc.: $3,660
- Wild Birds Unlimited requires that you begin operations of your Wild Birds Unlimited Store with the RMS Point-of-Sale software.
- You must purchase this software and first year maintenance fee directly from the software reseller, and you must also pay Wild Birds Unlimited $3,660 which includes the cost of a site visit from a member of its staff or its approved third-party provider (currently, Retail Information Technology Enterprises) to install and train you in the use of the software, a Point-of-Sale software upgrade for the Daily Savings Club, and your first year’s Annual Point-of-Sale Fee.
6. Grand Opening Advertising: $5,000
- If you are opening a Wild Birds Unlimited Store, upon signing your Franchise Agreement, you must pay Wild Birds Unlimited $5,000 for advertising expenses associated with the opening and grand opening advertising campaign.
- Upon submitting paid invoices to third party suppliers to Wild Birds Unlimited, you will be reimbursed by Wild Birds Unlimited within 30 days.
- Third party suppliers include, but are not limited to, printing companies or approved print houses for the purchase of customer postcards and marketing materials, local media for advertising placement, and a mailing house for postage and mailing charges.
- If you do not submit paid invoices to Wild Birds Unlimited within 60 days of opening your Store, the $5,000 fee will not be reimbursed to you.
7. Royalty: 4% of your Store’s Gross Sales
- Due Date: Payable monthly; must be received at Wild Birds Unlimited headquarters in Carmel, Indiana by close of business on the 10th day of the following month.
8. Local Advertising: a minimum of 2% of your Store’s Gross Sales
- Due Date: As incurred.
- Payable to local ad agency, media, and vendors.
- Wild Birds Unlimited recommends that new Store owners spend between 8% and 10% of your Store’s Gross Sales on Advertising in your first year of operations.
9. Regional/Local Advertising Cooperative: maximum of 2% of your Store’s Gross Sales
- Due Date: As required by co-op by-laws.
- Credited toward the required local advertising expense described above.
- Wild Birds Unlimited has established no co-ops as of the date of the 2017 Disclosure Document.
10. Wild Birds Unlimited Advertising Fund: 0.5% of your Store’s Gross Sales
- Due Date: Payable monthly; must be received at Wild Birds Unlimited headquarters in Carmel, Indiana, by close of business on the 10th day of the following month.
11. Assignment: 50% of the then-current Initial Franchise Fee, plus a $5,000 training fee
- Due Date: As incurred.
- Your assignee must pay the then-current training fee.
- You do not owe Wild Birds Unlimited any assignment fees if you transfer to a legal entity and you are the sole owner of that legal entity.
12. Court Costs and Attorneys’ Fees: will vary under circumstances
- Due Date: As incurred.
- Payable if you fail to comply with the Franchise Agreement.
13. Audit: cost of audit, which will not exceed $5,000, plus interest on amount of overdue monies
- Due Date: As incurred.
- Payable only if Wild Birds Unlimited’s audit reveals an understatement of Gross Sales for any month greater than 2%. Any amounts unpaid, unreported, or underreported must also be paid in full.
14. Indemnification: will vary under circumstances
- Due Date: As incurred.
- You must reimburse Wild Birds Unlimited if it is held liable for claims arising from your franchise operations.
15. Relocation of Store: a per diem fee (currently ranging from $43 to $67) to assist you in site location, plus Wild Birds Unlimited’s out-of-pocket costs of assisting you, which includes its travel costs
- Due Date: As incurred.
- This fee is payable at Wild Birds Unlimited’s election.
16. Late Payment Charges: late fee of $35, plus interest at an annual rate of 2% in excess of Prime Rate, as reported in the Wall Street Journal, or the maximum amount allowed by state law
- Due Date: As incurred.
- These charges are payable on all fees due Wild Birds Unlimited which are not paid by the due date.
17. Monthly Marketing Activity Report Late Fee: late fee of $25
- Due Date: As incurred.
- This charge is due within 30 days of a late submission of the Monthly Marketing Activity Report, which is due on the 10th of the month.
18. Annual Point-of-Sale Fee: annual fee currently equal to $360
- Due Date: Annually.
20. Kibo – Internet Store Fees: Order Management Fee equal to 8% of the order total, shipping and sales tax for every order fulfilled; and a Shipment Fee of $1.29 per order fulfilled
- Due Date: As incurred.
- Payable only if you utilize the Kibo Website and successfully request to fulfill customer orders.
21. Annual Mystery Shop Fee: $300 per year
- Due Date: As incurred.
- The Mystery Shop fee is required on an annual basis.
22. Daily Savings Club Customer Loyalty Program: various expenditures for ongoing purchases of Daily Savings Club customer applications, ranging from $0 to $100 per month
- Due Date: As incurred.
23. Annual Computer Maintenance Fee: variable depending on amount of effort required by Wild Birds Unlimited’s third party provider to bring your computer systems up to Wild Birds Unlimited Standard Specifications
- Due Date: Annually after your first year of operation.
- This fee will vary due to the condition of your computer systems. This fee is paid to Wild Birds Unlimited’s third party provider, Retail Information Technology Enterprises, at a current rate of $85 per hour.
- This service is required to ensure that your computer systems are up to date and functioning properly.
- If you keep your computer software and hardware systems up to date, it is anticipated that the time to review and update your systems will be approximately one hour per computer, but it could be longer, depending on many different factors.
24. Online Store License Fee: amount to be determined by Wild Birds Unlimited, not to exceed $200 per month
- Due Date: Monthly; at the same time as royalty payments.
- If and when Wild Birds Unlimited rolls out the Online Store to its franchisees, you may be required to participate and pay this monthly fee.
- Wild Birds Unlimited reserves the right to increase the amount of this fee above $200 per month upon prior notice.
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