If you are considering a Two Men and a Truck franchise, don’t get blindsided by these 32 important franchise fees (from the initial franchise fee, to the royalty fee, to 30 other fees found in Items 5 and 6 of Two Men and a Truck’s 2017 FDD).
1. Initial Franchise Fee for Standard Franchise: $50,000 to $85,000
- The initial franchise fee for a standard franchise is $50,000 for a Marketing Area where Two Men and a Truck has had no prior presence, and is $85,000 for a Marketing Area where Two Men and a Truck has had a prior presence in any portion of the Marketing Area.
- The initial franchise fee grants you the right to operate within a specified Marketing Area that will generally have a population of approximately 420,000, although some pre-designed Marketing Areas will exceed 420,000 in population.
- In some circumstances, Two Men and a Truck may approve a Marketing Area that is not a pre-designed Marketing Area that contains a population of more than 420,000. In those cases, Two Men and a Truck may charge an additional initial franchise fee based on $10,000 for every additional 50,000 population within that area ($10,000 x the actual additional population ÷ 50,000).
2. Initial Franchise Fee for Mini-Market Franchise: $15,000 to $30,000
- The initial franchise fee for a mini-market franchise will vary based on the population of the Marketing Area as follows: if the Marketing Area has 75,000 or less in population, the initial franchise fee is $15,000; if the Marketing Area has between 75,001 to 100,000 in population, the initial franchise fee is $20,000; and if the Marketing Area has between 100,001 and 200,000 in population, the initial franchise fee is $30,000.
- Two Men and a Truck is a member of the International Franchise Association and participates in the International Franchise Association’s VetFran Program, which provides a 10% discount on initial franchise fees to veterans of the U.S. Armed Forces who otherwise meet the requirements of the VetFran program.
3. Franchise Reservation Fee: $10,000
- If Two Men and a Truck enters into a Preliminary Approval Agreement with you before you sign a Franchise Agreement, you must pay a franchise reservation fee of $10,000 at the time you sign the Preliminary Approval Agreement.
- If you enter into a Franchise Agreement with Two Men and a Truck, the franchise reservation fee will be applied to the initial franchise fee due under the Franchise Agreement.
- If the Preliminary Approval Agreement expires or terminates for any reason other than the signing of a Franchise Agreement, Two Men and a Truck will retain the franchise reservation fee.
4. Area Development Fee: initial fees for each of the Marketing Areas you have a right to develop under the Area Development Agreement
- If you become an Area Developer by signing an Area Development Agreement, you pay Two Men and a Truck the initial fees for each of the Marketing Areas you have a right to develop under the Area Development Agreement at the time you sign the Area Development Agreement.
5. Royalty Fee: 6% of all Gross Sales
- Due Date: The 15th day of each month or by 5:00 p.m. of the first business day following the 15th, if the 15th is not a business day; payments made by automated clearing house (ACH) transfers.
- Gross Sales include all revenue from any source as defined in the Franchise Agreement or otherwise by Two Men and a Truck.
6. Contributions to Advertising Fund: 1% of all Gross Sales
- Due Date: The 15th day of each month or by 5:00 p.m. of the first business day following the 15th, if the 15th is not a business day; payments made by ACH transfers.
- The Advertising Fund is administered and controlled by Two Men and a Truck.
7. Monthly Technology and Support Fee (standard franchise): 1% of Gross Sales with a minimum payment of $1,200 per month
- Due Date: The 15th day of each month or by 5:00 p.m. of the first business day following the 15th, if the 15th is not a business day; payments made by ACH transfers.
- Two Men and a Truck may change this fee based on the amount required to develop and support the operating system and other programs.
8. Monthly Technology and Support Fee (mini-market franchise): 2% of Gross Sales with no minimum
- Due Date: The 15th day of each month or by 5:00 p.m. of the first business day following the 15th, if the 15th is not a business day; payments made by ACH transfers.
- Two Men and a Truck may change this fee based on the amount required to develop and support the operating system and other programs.
9. Fees for Customer Relationship Center (CRC) Services: $1,000 per month, plus a $35 per transaction fee for each completed move originating from the CRC
- Due Date: Paid by ACH transfers on the last business day of the month in which they are incurred.
- These services are required for all new franchisees and are being phased-in as a required service for all existing franchisees through 2018.
10. Records and Bookkeeping Fees: $200 to $500 per month; late fee of $100 for failure to timely submit data
- Due Date: Paid by ACH transfers on the last business day of the month in which they are incurred.
- These services are optional for standard franchises and required for mini-market franchises.
11. Risk Management and Safety Services Fees: $2,000 to $3,000 per year
- Due Date: Paid by ACH transfers on the last business day of the month in which they are incurred.
- Two Men and a Truck may require you to obtain these services from it or a Designated Supplier.
12. Local Advertising Expenditures (standard franchise): for each calendar year, an average of $1,500 per month for new franchises until operated for a full calendar year, and otherwise 2% of Gross Sales of the previous calendar year
- Due Date: As incurred.
- You must spend the required minimum amounts on local advertising. Two Men and a Truck may increase the percentage of Gross Sales to 3% in some circumstances.
13. Local Advertising Expenditures (mini-market franchise): for each calendar year, the greater of 2% of Gross Sales or $1,000 per month
- Due Date: As incurred.
- You must spend the required minimum amounts on local advertising.
- Two Men and a Truck may require you to spend some or all of these amounts on advertising methods specified by it.
14. Advertising Cooperative: as assessed by cooperative
- Due Date: As assessed.
- Cooperatives can impose assessments for advertising of up to 2% of Gross Sales.
15. Miscellaneous Fees and Charges: as assessed for goods or services provided ($30 to $300)
- Due Date: Any charges will be paid by ACH transfers on the last business day of the month in which they are incurred.
- Includes payments for behavioral assessments, career ads, and technical support services purchased from Two Men and a Truck.
16. NSF Fees and Interest: NSF fee of at least $100 and interest of 2% per month or maximum rate allowed by law
- Due Date: As incurred.
- An NSF fee must be paid if you have insufficient funds to cover an electronic transfer and interest must be paid on all overdue amounts.
17. Audit Expenses: cost of audit
- Due Date: On receipt of Two Men and a Truck’s invoice.
- Two Men and a Truck reserves the right to require you to pay it or its representatives or third-party agents for the reasonable expenses of an audit, inspection, and investigation.
18. Fees for Assistance in Commencement and Operation of Franchise: $500 to $1,200 per day, plus travel and living expenses of training personnel
- Due Date: On receipt of Two Men and a Truck’s invoice.
- Two Men and a Truck will provide reasonable assistance to you in the commencement and operation of your franchise.
- Two Men and a Truck may charge a reasonable per diem fee plus travel and living expenses of its staff or third-party vendors providing this assistance.
19. Indemnification: will vary under circumstances
- Due Date: As incurred.
- You must reimburse Two Men and a Truck if it incurs liability from the operation of your franchise.
20. Attorney’s Fees and Costs: will vary under circumstances
- Due Date: As incurred.
- You must pay Two Men and a Truck’s costs if it must take action to enforce your obligations to it.
21. Reimbursement for the Cost of Insurance: $25,000 to $43,000 annually
- Due Date: As incurred.
- If you fail to obtain or maintain any of the required insurances, Two Men and a Truck may obtain that insurance on your behalf and you must reimburse it for the cost.
- Payments relating to Participation in Captive Insurance Program.
- Paid by ACH transfers on the last business day of the month in which they are incurred.
22. Tax Reimbursement Fees: will vary with circumstance
- Due Date: As incurred.
- These fees will be paid to Two Men and a Truck to reimburse it for sales, use, personal property, and other taxes it pays.
23. Renewal Fee: 10% of the franchise fee charged to new franchisees at the time of renewal (the fee is 20% if you do not timely renew)
- Due Date: Paid by ACH on the date of renewal.
- This fee must be paid if you renew your Franchise Agreement.
24. Fee for Adding a Person as a Franchisee or as a Principal of the Franchisee: 12½% of the franchise fee charged to new franchisees at time of addition for each person added
- Due Date: Before person is added and before training has started for that person.
- This fee must be paid for each person you add as a franchisee or principal of your franchise.
25. Marketing Area Division Fee: 25% of the franchise fee charged to new franchisees at the time of transfer
- Due Date: Before transfer and before training of proposed transferee.
- This fee must be paid if you transfer your franchise or divide your Marketing Area.
26. Fees for Additional Training and Meetings: $125 to $900 for registration fees for meetings; $500 to $1,200 per person per day, plus travel and living expenses of training personnel for additional training
- Due Date: Before additional training.
- Two Men and a Truck may charge fees, including a reasonable per diem fee or registration fees for attending additional training or meetings.
27. Fee for Administering National Accounts or National Programs: 5% to 10% of each payment you receive from the National Account or in connection with the National Program
- Due Date: On receipt of payment from the National Account or in connection with the National Program.
- Two Men and a Truck does not currently charge any fees for administering these programs.
28. Vendor Product Testing Fee: actual out-of-pocket cost, plus $125 per hour for evaluation
- Due Date: On receipt of Two Men and a Truck’s invoice.
29. Liquidated Damages: $100 to $4,000
- Due Date: Any charges will be paid by ACH transfers on the 5th business day following the invoice date.
30. Indemnification for Amounts Paid to Resolve Franchisee’s Disputes: varies under the circumstances
- Due Date: On receipt of Two Men and a Truck’s invoice.
31. Fees and Third Party Software License Fees: $1,500 to $6,600 per year
- Due Date: As incurred.
- In order to use Two Men and a Truck’s Automation Systems, you must have access to the Internet. Also, you must acquire some third-party software for use in your business (for example, bookkeeping software).
32. Holdback Amount for Customer Claims: 1.5% of Gross Sales for the preceding calendar month
- Due Date: Paid by ACH five days before expiration or termination.
- You must pay this amount if your franchise is expiring or terminating.
- This amount will be held by Two Men and a Truck for six months and used to resolve any customer disputes. The balance will be returned to you.
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