Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

  • Anytime Fitness
  • CruiseOne
  • Firehouse Subs
  • Jimmy John's
  • Massage Envy
  • Menchie's
  • Orange Leaf Frozen Yogurt
  • Planet Fitness
  • The UPS Store
  • Yogurt Land
  • And Hundreds More...

No, thanks. I'm not interested in uncovering the actual earnings of hundreds of franchises at this time.

Considering a Capriotti’s Franchise? Don’t Overlook These 19 Important Franchise Fees

by Franchise Chatter on July 25, 2017

in Franchise Fees, Sandwich Franchise, Sub Sandwich Franchise



Franchise Chatter Membership Information

Don't Invest in a Franchise Until You Check Out This List

Capriotti's Sandwiches

If you are considering a Capriotti’s franchise, don’t get blindsided by these 19 important franchise fees (from the initial franchise fee, to the royalty fee, to 17 other fees found in Items 5 and 6 of Capriotti’s 2017 FDD).

1.  Initial Franchise Fee:  $40,000



  • The initial franchise fee due under each Franchise Agreement (where no development rights are granted) is a lump sum payment of $40,000, payable in full at the time you sign the Franchise Agreement.
  • The initial franchise fee is fully earned when paid and non-refundable in consideration of Capriotti’s administrative and other expenses incurred in granting the franchise and for its lost or deferred opportunity to franchise others.

2.  Development Services Fee:  $6,000

  • You also must pay a Development Services Fee for each Franchised Restaurant you develop, for Capriotti’s costs incurred in site selection assistance, layout and design assistance, plan review and lease review assistance. This fee is $6,000 and is due in a lump sum when you sign the Franchise Agreement. This fee is fully earned and non-refundable.

3.  Development Fee:  see below

  • If you sign an Area Development Agreement, the initial franchise fee due for each restaurant slated for development, including the first restaurant, is $30,000.
  • When you sign the Area Development Agreement, you also must sign a Franchise Agreement for the first restaurant to be developed and pay Capriotti’s a development fee.
  • The development fee is the sum of the following amounts: (1) the $30,000 initial franchise fee for the first restaurant to be developed under the Area Development Agreement (for which you concurrently sign the Franchise Agreement); (2) the $6,000 Development Services Fee due for the first restaurant to be developed under the Area Development Agreement; and (3) a deposit equal to 33% of the total initial franchise fees due for all additional restaurants (after the first restaurant) which the Area Development Agreement grants the Developer the right to develop.
  • The development fee is not refundable under any circumstances, even if you do not comply or attempt to comply with the Development Schedule and Capriotti’s then terminates the Area Development Agreement.
  • While the development fee is not refundable, each time you sign a Franchise Agreement for another restaurant to be developed within the Designated Territory, Capriotti’s will apply the deposit related to that restaurant (which is part of the development fee) toward the initial franchise fee due for that restaurant (leaving 67% of the initial franchise fee due at time of signing).
  • Except as provided above, the initial franchise fee and development fee are uniform to all franchisees and developers under the franchise offering.

4.  Royalty Fee:  6% to 7% of monthly Gross Sales

  • Due Date:  Payable the 5th day after the end of each calendar month along with the Royalty Fee report.
  • Your Royalty Fee is 7% of monthly Gross Sales if you sign an individual Franchise Agreement to operate 1-2 Franchised Restaurants. You will pay 6% of monthly Gross Sales if you sign an Area Development Agreement to operate 3 or more Franchised Restaurants.
  • Should you default on the Area Development Agreement before opening the 3rd Franchised Restaurant, your monthly Gross Sales will immediately revert to 7% of monthly Gross Sales on all existing Franchise Agreements.

5.  Marketing Fund:  up to 3% of monthly Gross Sales

  • Due Date:  Payable monthly with your Royalty Fee.
  • You must make contributions to the Marketing Fund.

6.  Cooperative Advertising:  up to 2% of your monthly Gross Sales

  • Due Date:  As determined by the Cooperative.
  • Capriotti’s currently has 1 advertising Cooperative in the Las Vegas area. If you live outside the Las Vegas market, you may have to join a local advertising Cooperative established in your area.
  • If Capriotti’s establishes an advertising Cooperative, you will have 1 vote per restaurant. If Capriotti’s owns restaurants in the market, it will have 1 vote for each of the restaurants it owns in the market.
  • Contributions are non-refundable unless the Cooperative is dissolved with unused money. If there is no cooperative in your area, you might be required to spend this amount on Local Advertising.

7.  Initial Training for Additional Managers:  the greater of $3,500 or the actual out-of-pocket expenses



  • Due Date:  Upon commencement of training.

8.  Additional Training for Persons Having Received Initial Training:  the greater of $3,500 or the actual out-of-pocket expenses

  • Due Date:  Upon commencement of assistance.
  • You pay for additional training if you request it.

9.  Copy of Manual:  $1,000 for paper copy (electronic copy available at no charge)

  • Due Date:  10 days after billing.
  • Cost of replacement copy.

10.  Employment Fee:  currently, $10,000 per employee

  • Due Date:  As incurred.

11.  Approval of New Supplier:  Capriotti’s cost incurred in approving supplier

  • Due Date:  Upon submission of sufficient background information on the supplier.

12.  Transfer Fee:  greater of $10,000 or 5% of the sales price (but not to exceed $20,000)

  • Due Date:  At time of approved transfer.
  • No transfer fee if 100% of interest in franchise is transferred to a corporation, partnership, or limited liability company controlled by you.

13.  Renewal Fee:  $10,000



  • Due Date:  Upon signing of new Franchise Agreement.

14.  Relocation:  $5,000

  • Due Date:  As incurred.
  • Due if you wish to relocate the Restaurant’s premises and Capriotti’s is involved in the process.

15.  Audit:  cost of audit plus interest at the rate of Wall Street Journal Prime Rate plus 5% on underpayment

  • Due Date:  10 days after billing, with interest, beginning from the date of underpayment
  • Cost of audit payable only if audit shows an underpayment of any amount owed to Capriotti’s of 3% or more.

16.  Bookkeeping Services:  $100 per hour

  • Due Date:  When billed.
  • Payable if you fail to provide timely financial reports twice in a 24-month period and Capriotti’s requires you to use its bookkeeper.

17.  Late Fees:  $250

  • Due Date:  When billed.
  • Charged on all overdue amounts.

18.  Costs and Attorneys’ Fees:  will vary based on circumstances

  • Due Date:  As incurred.
  • Due when you do not comply with the Franchise Agreement or Area Development Agreement.

19.  Indemnification:  will vary based on circumstances

  • Due Date:  As incurred.
  • You must reimburse Capriotti’s if it is held liable for claims arising from its operation of your franchise.

Franchise Matching Quiz



Franchise Matching Quiz

{ 0 comments… add one now }

Leave a Comment

Previous post:

Next post: