If you are considering a Minuteman Press franchise, don’t get blindsided by these 8 important franchise fees (from the initial franchise fee, to the royalty fee, to 6 other fees found in Items 5 and 6 of Minuteman Press’s 2017 FDD).
1. Initial Franchise Fee: $23,000 to $47,500
- Except as noted below, all franchisees purchasing a new franchise pay an initial fee of $47,500 when they sign the Franchise Agreement.
- If you purchase an existing center, you will be required to pay Minuteman a Transfer/Training fee of $23,000 or the then-current fee.
- Prior to signing the Franchise Agreement, you will be required to pay a $5,500 deposit, commonly referred to as a “binder.” This binder is fully refundable if you do not purchase a franchise. After Minuteman receives your binder, it begins the search for your location.
- When you sign the Franchise Agreement, the binder is applied against the initial franchise fee, leaving a balance of $42,000 (or $17,500 if a transfer) which is then non-refundable and due at closing.
- If you are an existing franchisee, you will pay a reduced non-refundable franchise fee of $23,000 for an additional outlet.
2. Equipment: $4,135 to $48,043
- In addition to the fees described above, you will need to purchase or lease equipment before you open your center. Minuteman currently recommends and makes available to its new franchisees the 2016 equipment package.
- If purchased from Minuteman, the cost of the 2016 package is $48,043 plus taxes and shipping, which is nonrefundable and due at closing.
- If you lease the equipment package, you will be required to make a down payment or prepayment for the equipment of approximately $4,135. All down payments are non-refundable.
3. FLEX Management Software: $0 to $6,995
- You are also required to purchase Minuteman’s proprietary FLEX Management Software.
- If you purchase the equipment package from Minuteman, the software is included. If not, you will pay a $6,995 software license fee to Minuteman.
- If you purchase an existing center currently using third party software, FLEX, FOCUS, or an earlier version of Minuteman’s management software, you will pay to Minuteman a software license fee ranging from $495 to $6,995.
- All software license fees are non-refundable.
4. Royalty: 6% of total gross revenue, subject to Minuteman’s Royalty Incentive Program
- Due Date: Payable monthly by the 10th day of the next month via electronic funds transfer.
- Gross revenue is defined as the total of all sales from the franchise location, excluding sales tax.
- Section 6(b) of the Franchise Agreement requires you to pay Minuteman a continuing royalty payment amounting to 6% of gross revenue, payable monthly via electronic funds transfer.
- If you purchase a new franchise, the royalty fee is waived for the first two months.
- There is a late charge if you submit your royalty fee or royalty statement after the due date. The late charge is up to $10 per day for each day the royalty fee is late, and a $100 late report fee.
- Minuteman currently offers a unique royalty incentive program for the benefit of qualifying franchisees. In order to qualify for this program, you must regularly submit your royalty payments and statements on a timely basis as required in Section 6(b) of the Franchise Agreement and otherwise be in compliance with all the terms of the Franchise Agreement.
- If you meet this criteria, your royalty payment will be capped at a percentage of a set amount (“Maximum Gross Billing Amount”). All sales you make above that amount will not be subject to royalty payments. Please note that Minuteman reserves the right to raise the Maximum Gross Billing Amount or otherwise discontinue this program.
5. Software: $6,995 and $285 (plus applicable sales tax)
- Due Date: $6,995 at the time of purchase and $285 annual fee payable on the anniversary date of the software license.
- Fees for software, updates, and support.
6. Audit: cost of audit will vary
- Due Date: Payable at time of audit.
- Payable only if Minuteman’s audit shows an understatement of Gross Revenue greater than 2% or if audit is necessary due to your failure to furnish reports.
- Minuteman may perform an audit if you fail to timely submit monthly gross sales reports, financial statements, or other required financial information.
7. Additional Training: hotel, food, and airfare
- Due Date: As incurred.
- Minuteman agrees to offer additional training at home office. You are responsible to pay lodging and airfare.
- Minuteman will have no obligation to pay for transportation and lodging expenses and will pay no compensation for any service performed by franchisee or its representative during such additional training period.
8. Transfer/Training Fee: the greater of $23,000 or then-current fee
- Due Date: Payable at time of transfer.
- Applies to the purchase of an existing center.