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Considering a Tilted Kilt Franchise? Don’t Overlook These 22 Important Franchise Fees

by Franchise Chatter on May 25, 2017

in Franchise Fees, Restaurant Franchise, Sports Bar Franchise



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If you are considering a Tilted Kilt 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 Tilted Kilt’s 2017 FDD).

1.  Initial Franchise Fee:  $75,000

  • An initial franchise fee of $75,000 is payable to Tilted Kilt in full when you sign the Franchise Agreement for your Tilted Kilt Restaurant.
  • Tilted Kilt uses the proceeds that it retains from your payment to defray its costs and expenses relating to the sale of the franchise, for providing assistance to you, and for other general costs and expenses. The initial franchise fee is not refundable under any circumstances.
  • Tilted Kilt offers a discount of 10% off the initial franchise fee for the first franchise you purchase if you are an honorably-discharged veteran of the United States armed forces.

2.  Royalty:  6% of Gross Sales

  • Due Date:  Payable on the day of the week Tilted Kilt periodically designates, based on the prior week’s Gross Sales.
  • Royalties are paid by electronic transfer of funds that Tilted Kilt initiates.
  • Royalties and other fees will be paid on the dollar value of all comps over 2% of Gross Sales, except during the first 90 days of Restaurant operations. Royalties and other fees on all comps will be waived during this 90-day period.

3.  Interest:  lesser of 1½% per month or highest rate of interest allowed by law



  • Due Date:  On demand.
  • Begins to accrue the day after payments are due.

4.  Late Charge:  $100 per incident

  • Due Date:  Automatically assessed and debited after due date.
  • Assessed on all late payments, late submittals of weekly sales and management information reports or other performance reports that Tilted Kilt may reasonably require.

5.  Minimum Advertising Expenditure:  4% of Gross Sales reduced by any required National Advertising Contribution and any required Local Advertising Group payments

  • Due Date:  Tilted Kilt does not collect this fee; it is retained by you for use in your local area.
  • This is the minimum average amount which must be expended during each calendar quarter to advertise your Restaurant. This amount will be offset by any required National Advertising and Marketing Contribution.
  • If Tilted Kilt establishes a Local Advertising Group (LAG) which includes your Restaurant, a portion of your Minimum Advertising Expenditure may be reallocated to the LAG.
  • Your total required advertising expenditure obligations will not exceed 4% of your Gross Sales.

6.  National Advertising Contribution:  up to 2% of Gross Sales

  • Due Date:  Payable on the day of the week Tilted Kilt periodically designates, based on the prior week’s Gross Sales.
  • Tilted Kilt currently collects only 12% of Gross Sales, but reserves the right to increase that to up to 2% upon 60 days prior notice.
  • Contributions will be used primarily for the development and production of advertising for the Restaurants.
  • Tilted Kilt Restaurants will contribute the same as franchisee-owned Restaurants.
  • The National Advertising and Marketing Contribution is payable by electronic transfer of funds that Tilted Kilt initiates.

7.  Local Advertising Group (LAG):  up to 4% of Gross Sales reduced by any required National
Advertising Contribution

  • Due Date:  Payable on the day of the week Tilted Kilt periodically designates, based on the prior week’s Gross Sales, or as directed by the LAG.
  • As of the date of the 2017 Disclosure Document, there are no LAGs in existence. Tilted Kilt decides when it is appropriate to form a LAG in any particular region and has sole authority to establish LAG by-laws.
  • Tilted Kilt’s affiliates’ Restaurants will contribute on the same basis as franchised Restaurants.
  • Tilted Kilt must approve additional dues to be paid to the LAG.
  • Tilted Kilt has the right to designate geographic areas for LAGs in whatever way it deems appropriate and dissolve LAGs when it deems appropriate.
  • Your combined National Advertising Contribution and LAG contribution will not exceed 4% of your Gross Sales.

8.  Franchisor Service Charge:  will vary depending on circumstances

  • Due Date:  As incurred.
  • If Tilted Kilt provides on-site assistance at your request, it may charge you its representative’s travel, lodging, and other expenses in connection with the assistance, plus a fee for the services of its representative.
  • Currently, Tilted Kilt does not charge a fee.

9.  Audit Underreporting:  amount of deficiency, with interest on any past due amounts at lesser of 1½% per month or highest rate of interest allowed by law

  • Due Date:  Immediately after audit.
  • Payable if any audit discloses a deficiency in amounts owed to Tilted Kilt.

10.  Costs of Inspection and Audit:  costs of audit (including accountants’ and attorneys’ fees, as well as travel and living expenses)

  • Due Date:  As incurred.
  • Payable only if you understate your Gross Sales by more than 2%, do not submit reports to Tilted Kilt, or do not cooperate in performance of the inspection and audit, including failing to have the books, records, and other information regarding your Restaurant available for audit.

11.  Transfer Fee:  $15,000 per Restaurant

  • Due Date:  Before effectiveness of transfer.
  • Payable when the Franchise Agreement, interest in the Restaurant, or the franchise is transferred by you. The transferee is charged no initial franchise fee.
  • If the transfer is from an individual to an entity controlled by that individual, Tilted Kilt will not charge a transfer fee, but you will be required to reimburse Tilted Kilt its direct costs (including reasonable legal fees) that it incurs in documenting and processing the transfer.

12.  Renewal Fee:  25% of the then-current initial franchise fee for a single (first) franchise

  • Due Date:  When you sign the then-current Franchise Agreement.
  • Payable if you opt for and qualify for a successor franchise at the end of the term.

13.  Training Program Expenses:  currently $0



  • Due Date:  As incurred.
  • S.T.E.P. Training is included as part of your initial franchise fee for up to 4 people (after your first Restaurant, 2 people), except for those costs as may be paid to other parties.
  • Tilted Kilt may charge training tuition for additional attendees and replacement managers at its then-current rates. Tilted Kilt may require continuing training at other times and reserves the right to charge tuition for the same.
  • If you request, and Tilted Kilt agrees to provide, additional onsite training for your second or subsequent Restaurant openings, it reserves the right to charge you an hourly fee, plus its representative’s travel and living expenses.

14.  Inventory Purchases:  current published prices

  • Due Date:  As incurred, on net 30 day terms.
  • Tilted Kilt may charge you for items you purchase through it or its affiliates. Currently, Tilted Kilt does not sell any items to franchisees, but reserves the right to do so in the future.

15.  Software Licensing Fee:  currently $0

  • Due Date:  As incurred.
  • Tilted Kilt may charge you a fee for use of its proprietary software in your Restaurant.

16.  Website Fee:  currently $0

  • Due Date:  As incurred.
  • Tilted Kilt may require you to link your website to a website maintained by it and may also charge you a reasonable fee to establish and maintain such link.
  • Any amount you are required to spend shall be credited toward your Minimum Advertising Expenditure.

17.  Costs and Attorneys’ Fees:  will vary depending on nature of your default

  • Due Date:  As incurred.
  • If Tilted Kilt prevails in a proceeding initiated by you or Tilted Kilt.

18.  Indemnification Under Franchise Agreement:  will vary depending on nature of the claim against Tilted Kilt

  • Due Date:  As incurred.
  • You have to reimburse Tilted Kilt if it is held liable for claims resulting from your Restaurant.

19.  Insurance Premiums:  will vary depending on your location and insurer

  • Due Date:  As incurred.
  • If you do not pay your premiums, although it does not have to, Tilted Kilt can pay them for you and you must reimburse it.

20.  New Supplier Test Fee:  will vary but will not exceed cost of test

  • Due Date:  As incurred.
  • If you propose a new supplier, Tilted Kilt will test required samples before approval and use.

21.  Assumption of Management:  10% of Gross Sales plus out-of-pocket costs of Tilted Kilt or its designee

  • Due Date:  As incurred.
  • In certain circumstances, Tilted Kilt has the right to assume management of your Tilted Kilt Restaurant. If it exercises this right, you shall pay this fee after it (or a third-party designee) assumes management.

22.  Damages:  will vary under the circumstances

  • Due Date:  As incurred.
  • If the Franchise Agreement is terminated because of your default or by you without cause, you will pay Tilted Kilt liquidated damages equal to the net present value of the Royalty payments, Advertising Contributions, and LAG contributions that would have become due had the Franchise Agreement not been terminated, for the lesser of (a) the date of termination to the scheduled expiration date of the Franchise Agreement or (b) 5 years.


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