If you are considering a CertaPro Painters franchise, don’t get blindsided by these 17 important franchise fees (from the initial franchise fee, to the royalty fee, to 15 other fees found in Items 5 and 6 of CertaPro Painters’ 2017 FDD).
1. Initial Franchise Fee: $51,750 to $57,500
- All new franchisees pay an initial franchise fee of $57,500, which is due in full upon signing of the Franchise Agreement.
- Occasionally, if a franchisee is in the process of obtaining financing for the franchise, such as through an SBA loan, a 401(k) retirement fund or otherwise, CertaPro Painters may allow the initial franchise fee to be paid in two payments.
- CertaPro Painters may provide, subject to availability, short-term financing for up to 90 days and up to one-half of the initial franchise fee (maximum of $28,750) for an approved franchisee who is in the process of obtaining financing for the franchise.
- CertaPro Painters is a member of the International Franchise Association and participates in the IFA’s VetFran program which provides special incentives to qualified veterans of the U.S. Armed Forces who otherwise meet the requirements of the VetFran program. CertaPro Painters reduces the initial franchise fee by 10% to $51,750 for qualified veterans participating in the VetFran program.
- In addition, for VetFran qualified franchisees, CertaPro Painters may finance up to one-half of the initial franchise fee ($25,875) for approved franchisees, subject to availability.
- The initial franchise fee is fully refundable if CertaPro Painters, in its sole discretion, rescinds the Franchise Agreement prior to the completion of your Initial Franchise Training.
- If you have not commenced operation of your franchised business within 120 days from the effective date of your Franchise Agreement, CertaPro Painters, at its sole discretion, may terminate the Franchise Agreement and give a partial refund of $10,000 of the initial franchise fee.
- There are no refunds under any other circumstances.
2. Software License Fee: $7,500
- At the start of Training Session A, you will pay CertaPro Painters a software license fee of $7,500 which is non-refundable.
3. Royalties: the greater of 5% of Gross Sales or the required Minimum Royalty Payment
- Due Date: Payable monthly on the 10th day of the month.
- Gross Sales means the total amount of all Residential or Commercial Services and sales for labor, material, and/or services performed or rendered by you or third-party subcontractors.
- If you sign the Agreement in January through May, for the second calendar year of your Franchise Agreement, you must pay a minimum of $22,500 in Royalty Fees; if you sign the Agreement in June through December, for the second calendar year, you must pay a minimum of $12,500 in Royalty Fees.
- For the third and fourth calendar years, you must pay a minimum of $25,000 in Royalty Fees in each calendar year; for the fifth and sixth calendar years, you must pay a minimum of $32,500 in Royalty Fees in each calendar year.
- For the seventh through ninth calendar years, you must pay a minimum of $42,500 in Royalty Fees in each calendar year.
- In the tenth calendar year, you must pay a minimum of $42,500 pro rated according to the number of months during that tenth year that you operated.
- Payment of minimum royalty fees is due by December 31 of each calendar year.
4. CertaPro University Recurrent Training: $40 per month
- Due Date: Payable monthly on the 10th day of the month.
- You are required to participate in and satisfactorily and timely complete annual recurrent online training through CertaPro University.
5. Additional Training: $100 to $300 per day
- Due Date: Payable as incurred.
- CertaPro Painters may also require you or your key employee(s) to attend and satisfactorily and timely complete 3 to 4 additional training sessions per year.
- You will also need to attend and satisfactorily and timely complete Commercial Services Training before you are authorized to perform Commercial Services.
6. Advertising Fees and Expenses: 12% of Gross Sales during your 1st year of operation; after 1st year, 8% of Gross Sales
- Due Date: Payable as incurred.
7. General Advertising Fund (“GAF”): 3% of Gross Sales
- Due Date: Payable monthly on the 10th day of the month.
8. Local Advertising Cooperative Fees: as voted by franchisees in the local advertising cooperative and can range from 1% to 3.5% of Gross Sales
- Due Date: As approved by the individual cooperative franchisees in the cooperative agreement. Payable monthly on the 10th day of the month.
- Amounts paid to your local advertising cooperative are credited against your required local advertising expenditures.
9. Transfer/Sale/Assignment: the greater of $5,750 or 10% of amount of the initial franchise fee in effect at the time of the sale of the Franchised Business or other transaction
- Due Date: As arranged.
- You must pay the Transfer Fee before you sell or transfer your Franchised Business to a buyer whom you located. This buyer must sign a new Franchise Agreement with current language and terms and must meet CertaPro Painters’ requirements to become a franchisee and to purchase the business being sold.
- Also, you must pay a Transfer Fee to assign the Agreement which can only be done in compliance with Article 14 of the Agreement.
10. Renewal: 10% of then-current initial franchise fee; reasonable attorneys’ fees
- Due Date: As arranged.
- You must pay CertaPro Painters’ attorney’s fees when you renew your franchise.
11. Annual Conference: $1,500 to $4,500
- Due Date: 2 months prior to conference date.
- This amount is per person and includes a registration fee paid to CertaPro Painters and the cost of lodging, but does not include air fare which will vary depending on the location of the annual conference, where the franchisee lives, and whether or not franchisee brings staff to the Annual Conference.
12. Sales/Production/Marketing Conference/Meeting: $1,000 to $1,500
- Due Date: 1 month prior to start date(s).
- This amount is per person and includes registration fee(s) paid to CertaPro Painters and the cost of lodging, but does not include air fare which will vary depending on the location of the meetings(s) or conference(s), where the franchisee lives, and how many staff attend.
13. Technology Fee: 0.25% of Gross Sales
- Due Date: Payable monthly on the 10th day of the month.
- Currently, franchisees receive a dollar for dollar credit on a monthly basis against GAF.
14. Late Payment Penalty: the lesser of 1.5% or the maximum rate allowed by law
- Due Date: Payable as incurred.
- Any amounts you owe to CertaPro Painters will begin to accrue interest the day after the date such amounts first become due.
15. Commercial Services Fee: $6,000
- Due Date: Payable as incurred.
- Before you will be authorized to perform Commercial Services, you must complete Commercial Services Training, pay the fee, and sign an addendum.
16. Commercial Services CRM Software Fee: $30/month
- Due Date: Payable annually in October in a lump sum.
- Before you will be authorized to perform Commercial Services, you must buy an annual license to use the required CRM software for your Commercial work.
17. Legal Fees: varies under the circumstances
- Due Date: Payable as incurred.
- You must pay CertaPro Painters’ costs and expenses if it is involved in litigation by or against you.
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