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Considering a Molly Maid Franchise? Don’t Overlook These 24 Important Franchise Fees

by Franchise Chatter on June 21, 2017

in Franchise Fees, Maid Franchise

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If you are considering a Molly Maid franchise, don’t get blindsided by these 24 important franchise fees (from the initial franchise fee, to the royalty fee, to 22 other fees found in Items 5 and 6 of Molly Maid’s 2017 FDD).

1.  Initial Fees:  Initial Franchise Fee of $14,900; Initial Package Fee of $10,000: Territory Fee of $1 per Target Household Value in your Territory

  • Upon signing of the Franchise Agreement, you must pay Molly Maid the following initial fees (the “Initial Fees”):
  • (1) An initial franchise fee of $14,900 (the “Initial Franchise Fee”);
  • (2) A fee of $10,000 (the “Initial Package Fee”) for Molly Maids’ initial package (the “Initial Package”) that includes initial licenses for its Software System (currently including Customer Care Software, Lead Management System, Bookkeeping Software, Listen 360, and the Molly Maid Teamsite), as well as the cost of operating equipment, computer, monitor, printer, computer software, supplies, and a $1,000 convention allowance (the “Convention Allowance”); and
  • (3) A territory fee equal to $1 per Target Household Value (“THV”) in your Territory (the “Territory Fee”), as described in Item 12, which meets Molly Maid’s then-current demographic formulation, which may vary based on the demographic information. Territory Fees typically range from $30,000 to $45,000 for a standard-size market and $20,000 to $30,000 for a mid-size market.

2.  Software System Fees

  • You must pay to Molly Maid, or its designee (ZorWare LLC), a fee for use of its Software System (currently including Customer Care Software, Lead Management System, Bookkeeping Software, Listen 360, and the Molly Maid Teamsite).
  • The setup fee is included in the Initial Package Fee of $10,000, which is collected via automatic bank draft from your bank account, at the signing of the Franchise Agreement. The Initial Package includes initial license fees for Molly Maid’s Software System.

3.  License Fee:  3 to 6 ½% of Gross Sales, except for “roll-in” sales. In addition, minimum license fees apply.

  • Due Date:  Due by automatic debit each Friday.
  • For the use of the Marks, System, Territory, and Manuals.

4.  MAP Fee:  the current fee is $450 per month per Molly Maid Franchise Agreement that you have entered into with Molly Maid, except that if you have entered into more than two Franchise Agreements with Molly Maid, you may only be required to pay the monthly MAP fee under two Franchise Agreements. In no event shall your total MAP Fee contribution exceed 2% of the total monthly Gross Sales for each of your Molly Maid franchises.

  • Due Date:  Due by automatic debit by the 15th day of each month.

5.  Local Marketing Requirement:  $1 per THV per year, which declines as Gross Sales increase, to a minimum of $0.15 per THV if criteria are met

  • Due Date:  Payable per supplier’s terms.
  • Including, but not limited to, promotional handouts, door hangers, media inserts, direct mail, newspaper and Internet paid placement, and surveys.

6.  Internet Connection and Anti-Virus Software:  the then-current fee. The current fee is $89-159 per month for 1 account/user on 1 computer.

  • Due Date:  Payable per supplier’s terms.
  • Payable to a third party.
  • To be operable before you attend initial training.

7.  Software System Fees:  $50 per week for the initial term of the Franchise Agreement

  • Due Date:  Paid weekly via credit card or automatic bank draft.
  • You must use the Software System (currently including Customer Care Software, Lead Management System, Bookkeeping Software, Listen 360, and the Molly Maid Teamsite).
  • Fee is paid to Molly Maid.
  • These weekly support and maintenance fees may change in the future.
  • Molly Maid may change the Software System from time to time.

8.  Call Center Service Fees:  the then-current fees. The current fees include a set-up fee of $99, a monthly fee of $0-$200 depending on services selected, plus $15-$25 per booked clean or estimate.

  • Due Date:  Payable per supplier’s terms.
  • During the hours of operation of the Call Center, either a live person in your office must answer all sales calls, or they must roll over to the Call Center.

9.  Conventions and Regional Meetings and Additional Training:  the then-current fee. The current registration fee is $275-$425 per person. Franchisees who do not attend one convention every two years may be charged up to $1,000 for failure to attend.

  • Due Date:  Before the start of the event.
  • Meeting room space, some meals, audio visual rental, workbooks, speakers, etc.
  • Does not include travel, lodging, or all meals.

10.  Renewal Fee:  $3,000 (or $2,000 if an e-renewal)

  • Due Date:  When you sign your Renewal Franchise Agreement.

11.  Transfer:  $9,900 if the transfer is to a new franchise owner; $2,000 if the transfer is to an existing Molly Maid franchise owner; or $500 if the transfer is to your immediate family member. If you authorize Molly Maid to enlist a third party broker to locate the transferee, you must pay Molly Maid the then-current broker fee. All outstanding fees due prior to transfer. Transferee must pay $6,000 for Molly Maid’s transfer initial package.

  • Due Date:  The transfer fee and the transfer initial package fee are due with the Franchise Agreement.
  • The transfer initial package fee may be reduced to $3,200 if the transferee acquires from the transferor a computer that is two years old or less and meets Molly Maid’s specifications, in which case such item will be removed from the Transfer Initial Package received by the transferee.

12.  Change of Legal Entity Fee:  $500

  • Due Date:  Upon signing transfer documents.
  • Due if you change the legal entity that owns the Business more than once.
  • There is no transfer fee for an initial transfer from an individual franchisee to an entity established solely for convenience of ownership and operation of the Business.

13.  Failure to Maintain Insurance:  Molly Maid’s actual cost for insurance premiums and a reasonable fee for the expenses Molly Maid incurs

  • Due Date:  On demand.
  • If you fail to maintain the required insurance coverage on your franchise, Molly Maid may acquire and pay for the insurance coverage and charge you.

14.  Interest:  12% per annum or the maximum permitted by law on unpaid balances

  • Due Date:  On demand.
  • The 12% charge is calculated at a per annum rate but may be collected on demand, including weekly or monthly through automatic bank draft.

15.  Late Fees:  $10 per day

  • Due Date:  On demand.
  • Applies to fees that are more than 10 days overdue.

16.  Audit:  cost of audit plus expenses, plus any amount owed as shown by the audit, plus interest and late fees

  • Due Date:  When you are billed.
  • Payable only if Molly Maid finds an understatement of Gross Sales of 2% or more or if you fail to provide requested information within 30 days of Molly Maid’s request.

17.  Indemnification and Attorneys’ Fees and Costs:  varies according to loss

  • Due Date:  On demand.
  • If Molly Maid must engage an attorney to enforce its rights under the Franchise Agreement and it prevails, or if it is sued because of something you do or fail to do, you must indemnify Molly Maid and/or reimburse it for all costs, including reasonable attorneys’ fees (which may include outside counsel fees and in-house legal costs charged at rates comparable to outside attorneys), interest, court costs and expenses expended or incurred in enforcing its rights.

18.  Territory Violation:  will vary depending on the type and severity of the violation

  • Due Date:  As incurred.
  • Only due if you service customers in a neighboring franchisee’s territory without prior written consent.

19.  Amendment Fee:  $250

  • Due Date:  When you are billed.
  • You must pay Molly Maid a processing fee for modifications to your Franchise Agreement that are made at your request.
  • When you request an amendment to your Franchise Agreement or related agreements, Molly Maid may require that you sign a general release releasing it from all claims you may have, except claims which, under state law, may not be released.

20.  Unapproved Suppliers:  Molly Maid’s actual out-of-pocket costs of inspection or testing

  • Due Date:  On demand.

21.  Tax Reimbursement:  varies according to tax

  • Due Date:  When you are billed.
  • You must pay Molly Maid or to taxing authorities (as applicable) an amount equal to any sales tax, use tax, gross receipts tax, documentary stamp tax, or similar tax (other than income tax), fees, or charges imposed on Molly Maid due to any required payments you make to Molly Maid.
  • You must pay Molly Maid such additional amounts as necessary so that Molly Maid receives all payments from you in full as if no such tax applied.

22.  Dishonored Check or ACH Draft:  $25

  • Due Date:  On demand.
  • You must pay Molly Maid for each check returned or ACH draft refused by your financial institution for insufficient funds in your account.

23.  Franchisor Employee Training Fee:  the then-current fee. The current fee is $7,500.

  • Due Date:  On hiring.
  • You must pay Molly Maid the then-current training fee if you hire its employee (or an employee of any affiliate or franchisee) without its prior written consent.

24.  Key Accounts/Management Fee:  up to 3% of total Gross Sales related to Key Account work, including Gross Sales that relate to Key Accounts; Gross Sales that are the result of any lead or any agreement developed by Molly Maid’s Business Development Department or any similar group that is part of the company or its designee; Gross Sales for work that is dispatched from any call center operated by Molly Maid or its designee; Gross Sales that are audited by Molly Maid or its designee according to Key Accounts standards; or Gross Sales that otherwise benefit from Molly Maid’s Key Accounts activities or management

  • Due Date:  When you are billed or when the fee is deducted from your payment(s) for work performed or added to the invoice.
  • If you participate in Molly Maids’ Key Accounts program, it reserves the right to require you to pay a Key Accounts/Management Fee to it or its designee.
  • Molly Maid may also sometimes refer to this fee as a “Key Accounts Management fee” or “Management fee.”

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