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Considering a Culver’s Franchise? Don’t Overlook These 30 Important Franchise Fees

by Franchise Chatter on May 9, 2017

in Franchise Fees, Frozen Dessert Franchise, Hamburger Franchise



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

If you are considering a Culver’s franchise, don’t get blindsided by these 30 important franchise fees (from the initial franchise fee, to the royalty fee, to 28 other fees found in Items 5 and 6 of Culver’s 2017 FDD).

1.  Initial Franchise Fee:  $45,000 to $55,000

  • If you are new to the System, you must pay an initial franchise fee of $55,000.
  • You will first sign a “Preliminary Agreement” attached to the 2017 disclosure document as Exhibit P, and you must pay an “Application Fee” of $5,000 to defray some of the cost of initial evaluation, processing of the application, and background investigation.
  • If you are approved as a Culver’s franchisee, the Application Fee will be credited towards the initial franchise fee as described below. If you are not approved, this fee will be refunded.
  • You must sign a separate Franchise Agreement for each Restaurant you open. You do not receive any right or interest to develop or operate additional Restaurants, except as described below.
  • If Culver’s approves you as a Culver’s franchisee, you must sign a Franchise Agreement within 12 months of the notice of operational approval and pay the balance of the initial franchise fee to Culver’s at that time.
  • If you do not sign a Franchise Agreement within 12 months after Culver’s notifies you in writing that you have received operational approval, it will refund your Application Fee and terminate the application process for a Culver’s franchise.
  • If your Franchise Agreement provides for this opportunity, Culver’s may offer you the opportunity to develop and operate an additional Culver’s franchise during the initial term of your first Culver’s Franchise Agreement for the fee of $45,000, provided the Operator for the additional Culver’s Restaurant is the same Operator as the first Culver’s Restaurant, you are in complete compliance with your Franchise Agreement, and you meet Culver’s then-current qualifications (among other things, financial stability, operations ability, and management skills).
  • If Culver’s permits you to open an additional Restaurant, it will waive your obligation to sign the Preliminary Agreement and will waive the Application Fee. Otherwise, the process of selecting a site and entering into a Franchise Agreement is the same as that described above.
  • Culver’s also currently offers a “Veterans’ Discount,” whereby it will reduce the initial franchise fee by $10,000 for qualified franchisees. In order to qualify for the Veterans’ Discount, you must be an honorably discharged United States veteran with a form DD 214, you must be opening your first Restaurant, and you must be the full-time on-site owner-operator and personally manage the Restaurant.
  • One of the distinguishing features of the Culver’s franchise is that you have the right to terminate the Franchise Agreement at any time before attending your fifth week of the 16-week management training program, provided you comply with the post-term obligations and sign a release.
  • Should you decide to terminate the franchise relationship with Culver’s before the start of your fifth week of the management training program, you must provide Culver’s with written notice, and it will refund 75% of your initial franchise fee.
  • In addition, if the Franchise Agreement terminates because you are unable to secure a site within 12 months after you sign the Franchise Agreement (meaning you do not own the site or you have not signed a lease for the site, without contingencies which remain unsatisfied), Culver’s will refund 50% of the initial franchise fee.
  • Except as described above, the initial franchise fee (including deposits) is not refundable.

2.  Territory Reservation Agreement:  $25,000

  • Certain existing Culver’s franchisees may be offered the opportunity to enter into a “Territory Reservation Agreement” with Culver’s in the form attached as Exhibit G to the 2017 disclosure document.
  • If you sign a Territory Reservation Agreement with Culver’s, you can reserve the right, for 18 months, to develop a Culver’s Restaurant in a defined area for a fee of $25,000. This fee is in addition to any initial franchise fee and is not refundable.

3.  Territory Fee:  $10,000 for each Restaurant you agree to establish under the “Development Schedule” described in the Development Agreement



  • If you are an existing Culver’s franchisee, or under certain circumstances, a new franchisee, Culver’s may offer you the opportunity to develop several restaurants within the designated area under a Development Agreement if you are in compliance with your current Franchise Agreement (if applicable) and you meet Culver’s then-current qualifications (among other things, financial criteria, operations ability, and management skills).
  • If you sign a Development Agreement, the Territory Fee is $10,000 for each Restaurant you agree to establish under the “Development Schedule” described in the Development Agreement. The Territory Fee for each Restaurant is in addition to the initial franchise fee under each Franchise Agreement.
  • The Territory Fee is not refundable under any circumstances.

4.  Service Fee:  4% of Gross Sales

  • Due Date:  Payable monthly on or before the 10th day of the next month via EFT.

5.  Advertising Fee:  2.5% of Gross Sales

  • Due Date:  Payable monthly on or before the 10th day of the next month via EFT.

6.  Cooperative Advertising:  up to 4% of your Gross Sales, as approved by a majority vote of the members of the Co-op Advertising Region

  • Due Date:  Established by Co-op.
  • If Culver’s forms a regional advertising Co-op, you must contribute to the Co-op.

7.  Additional Training:  $1,000 per person

  • Due Date:  2 weeks before beginning of additional training.
  • Additional training necessary after the completion of 16-week training program for you or your management.

8.  E-Learning Program:  currently $225 per quarter



  • Due Date:  Payable quarterly.
  • You will pay Culver’s or a designated supplier the then-current quarterly access fee.

9.  Additional Assistance:  $500 per week

  • Due Date:  30 days after billing.
  • This is for additional or special training or assistance you need or request.

10.  Site Review Fee:  $300 per site after four site reviews

  • Due Date:  As incurred.
  • Culver’s will review up to four sites you select as potential sites for your Restaurant at no charge. Culver’s may charge this site review fee for each additional site that it reviews.

11.  Custom Design Fee:  up to $5,000

  • Due Date:  Payable at time of the requested change.
  • Culver’s will provide you with its standard prototypical building plans at no charge. In the event that you want to make changes to Culver’s standard prototypical building plans, and if it decides to consider those changes, it may charge you this custom design fee to compensate it for its time and expense.

12.  Extraordinary Building Assistance Fee:  up to $30,000

  • Due Date:  At ground breaking.
  • Culver’s prototype plans are intended to convey its minimum standards to your architect. They are not intended to be bid documents or construction documents.
  • This fee may be applied to compensate Culver’s for its time and expense if the project is bid and/or built without complete and proper building, HVAC, electrical, plumbing, and food service plans prepared and sealed by a licensed design professional.

13.  Building Conversion Fee:  up to $5,000

  • Due Date:  Prior to design of second property.
  • Culver’s will provide conceptual sketches for one conversion property at no charge.
  • Sketches are intended to convey Culver’s minimum standards to your architect and are not intended to be bidding or construction documents.
  • If Culver’s develops a suitable plan and you fail to purchase and develop your first property and choose to evaluate a second property for building conversion, this building conversion fee may be charged to compensate Culver’s for its time and expense.

14.  Excessive Site Location Design Fee:  $500 per site location after four site locations

  • Due Date:  Prior to site layout on the 5th site location and each site location thereafter.
  • Culver’s will provide preliminary conceptual site designs for up to four site locations. It will also provide revisions as may be required by local ordinance or review, or a revision required to arrive at the best solution.
  • This fee may be charged if a design is requested for a fifth or subsequent site location.

15.  Transfer Fee:  $10,000 plus Culver’s attorneys’ fees; $5,000 plus Culver’s attorneys’ fees if the buyer is an existing franchisee

  • Due Date:  Before completion of transfer.
  • Payable when Franchise Agreement is transferred/assigned.
  • In the past, under certain circumstances, Culver’s has reduced or waived the transfer fees.

16.  Renewal:  $30,000

  • Due Date:  Upon signing successor Franchise Agreement.

17.  Insurance:  will vary under certain circumstances

  • Due Date:  As incurred.
  • Payable to Culver’s if you do not pay insurance and Culver’s pays it for you.

18.  Audit:  cost of inspection or audit

  • Due Date:  30 days after billing.
  • Payable if records indicate understatements in excess of 2%.

19.  Interest:  lesser of 1.5% per month or highest contract rate of interest allowed by law

  • Due Date:  30 days after billing.
  • Payable on all overdue amounts.

20.  Management Fee:  to be determined under circumstances

  • Due Date:  As agreed.
  • Payable during period that Culver’s appointed manager manages the Restaurant upon your death or disability.

21.  Gift Card Fees:  currently $0.20 per redeemed transaction

  • Due Date:  Upon redemption of a Gift Card at your Restaurant.
  • Culver’s reserves the right to increase the fee to $0.35 per redeemed transaction.

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

  • Due Date:  As incurred.
  • Payable upon your failure to comply with the Franchise Agreement.

23.  Indemnification:  will vary under circumstances

  • Due Date:  As incurred.
  • You have to reimburse Culver’s if it is held liable for claims arising from your Restaurant’s operations.

24.  Supplier Payments:  will vary under circumstances

  • Due Date:  As incurred.
  • If you fail to pay noncontested obligations and liabilities due to suppliers, lessors, or creditors, Culver’s may, but is not required to, make any such payment on your behalf and you must immediately reimburse it.

25.  Testing:  cost of testing

  • Due Date:  30 days after billing.
  • This covers the costs of testing new products or new suppliers you propose.

26.  Relocation Expenses:  costs of relocation

  • Due Date:  30 days after billing.
  • This covers the cost Culver’s incurs if you want to relocate the Restaurant.

27.  Technology Fee:  estimated $200 per month

  • Due Date:  Payable monthly on or before the 10th day of the next month via EFT.
  • Although Culver’s does not charge a fee at this time, it reserves the right to charge you a monthly fee in connection with your use of its online support center and other systems.

28.  Development Schedule Extension Fee:  $10,000 per Restaurant for an extension of up to 6 months

  • Due Date:  Payable when you request an extension to the Development Schedule under the Development Agreement.
  • Limited to a single extension per Restaurant (if Culver’s allows extension).

29.  Development Agreement Termination Fee:  $10,000 for each Restaurant to be developed under your Development Schedule for which you have not signed a Franchise Agreement or paid an initial franchise fee

  • Due Date:  Payable at time of termination.
  • If the Development Agreement is terminated for any reason (other than due to Culver’s breach of the Development Agreement), you must pay Culver’s a termination fee.

30.  Territory Reservation Extension Fee:  $10,000

  • Due Date:  Payable when you request an extension to the Territory Reservation Agreement.
  • Limited to a single 6-month extension.

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