Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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Considering a Great American Cookies Franchise? Don’t Overlook These 31 Important Franchise Fees

by Franchise Chatter on August 3, 2017

in Cookie Franchise, Franchise Fees



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

If you are considering a Great American Cookies franchise, don’t get blindsided by these 31 important franchise fees (from the initial franchise fee, to the royalty fee, to 29 other fees found in Items 5 and 6 of Great American Cookies’ 2017 FDD).

1.  Initial Franchise Fee:  $15,000 to $35,000



  • If Great American Cookies grants you a franchise for a Traditional Store, then when you sign the Franchise Agreement, you must pay Great American Cookies an initial franchise fee (“Franchise Fee”) of $25,000. The Franchise Fee for a Non-Traditional Store is $15,000. The Franchise Fee for a Co-Brand Store is $35,000.
  • During 2016, the initial Franchise Fees ranged from $5,000 to $35,000, which includes Satellites described below.
  • Great American Cookies does not offer financing for the Franchise Fee. Except for any special programs or periodic discounts Great American Cookies may offer or as otherwise described in this Item 5, the Franchise Fee is uniform for all franchisees.
  • Great American Cookies’ Patriot Program incentive provides a 25% reduction in the initial Franchise Fee due under Great American Cookies’ single unit Franchise Agreement for Traditional Stores only. This incentive may not be combined with any other incentive program and applies only to the first Store.

2.  Satellite Fee:  $5,000 per Satellite location

  • If Great American Cookies permits you to operate a Satellite, you must pay it a Satellite fee of $5,000 per Satellite location when you sign the Satellite Addendum. A copy of the Satellite Addendum is attached to the Franchise Agreement.
  • The Satellite fee is fully earned by Great American Cookies when paid, is not refundable, and is uniform to all franchisees.

3.  Initial Development Fee:  $5,000 per Store to be opened under the Area Development Agreement

  • If Great American Cookies grants you development rights, then you will pay it a development fee of $5,000 per Store to be opened under the Area Development Agreement when you sign the Area Development Agreement.
  • The development fee will vary based on the number of Stores that you agree to develop (with a minimum of 3 Stores), regardless of whether the stores are Traditional or Non-Traditional Stores.
  • The criteria used to calculate the number of Stores that you must develop in the Development Area for purposes of calculating the development fees is generally uniform for all franchisees.
  • The Franchise Fees for Stores opened under a Development Agreement (with a minimum of 3 Stores) will be $20,000 for the first Store and $10,000 for each additional Store thereafter.
  • For each Store, you must sign Great American Cookies’ then-current form of Franchise Agreement to govern the operation of that Store.
  • Great American Cookies reserves the right, but not the obligation, to reduce the Franchisee Fees for existing franchisees.
  • During 2016, Great American Cookies collected three initial development fees which ranged from $10,000 to $15,000.
  • The development fee is fully earned by Great American Cookies when paid and is not refundable.

4.  Site Selection Assistance:  Great American Cookies’ out-of-pocket expenses

  • Great American Cookies will review your submittal package for your proposed site and determine whether to accept your proposed site. It will conduct an on-site evaluation if it considers it necessary and appropriate as part of its evaluation of your submittal package.
  • If Great American Cookies determines that on-site evaluation is necessary and appropriate (on its own initiative), it will provide the evaluations (up to 2 days unless it agrees otherwise) at its own expense, although it reserves the right to charge you an additional fee for this service.
  • If Great American Cookies charges this fee, the fee will be Great American Cookies’ out-of-pocket expenses for each proposed site for which it conducts an on-site evaluation. Great American Cookies expects this fee to be $300 per employee or agent for each full or partial day after the second day, not to exceed five days.
  • The site selection assistance fee is not refundable.

5.  Initial Inventory:  $5,000 to $10,000

  • Before your Franchise opens, you must buy an initial inventory of Cookie Ingredients from GAC Supply. Great American Cookies estimates the cost of this initial inventory of Cookie Ingredients will be between $5,000 to $10,000 and is in addition to the Franchise Fee.
  • The amount charged for Cookie Ingredients is not refundable under any circumstances. Discounts may apply depending on your payment arrangements.

6.  Grand Opening Marketing Fee:  $3,000 to $5,000

  • Great American Cookies reserves the right to collect the grand opening marketing fee between $3,000 and $5,000 when you sign your Franchise Agreement.
  • If Great American Cookies collects this fee, it will either:  (i) reimburse you for your documented grand opening marketing expenditures that it has pre-approved, up to the $5,000; or (ii) directly pay your vendors for your grand opening marketing expenditures that it has pre-approved, up to the $5,000.
  • The grand opening marketing fee is not refundable.

7.  Royalty Fee:  6% of your Net Sales for the preceding month



  • Due Date:  Currently, 6:00 P.M. (Eastern Time) on the 10th day of the following month.

8.  Marketing Fee:  1 1/2% of your Net Sales for the preceding month

  • Due Date:  Currently, 6:00 P.M. (Eastern Time) on the 10th day of the following month.

9.  Local Marketing Requirement:  2% of your Net Sales

  • Due Date:  Annually.

10.  Interest:  18% per year (or maximum legal rate, if less)

  • Due Date:  On demand.
  • If you fail to make a payment due to Great American Cookies on time, you must pay it interest on the amount owed from the due date until paid in full.

11.  Late Fee:  $25 per week

  • Due Date:  On demand.
  • If you fail to make a payment due to Great American Cookies on time, you must pay it the late fee.
  • It may increase the late fee on 60 days’ written notice. However, it may not increase the late fee more than once in any 12-month period.

12.  Additional Training:  currently, $300 per employee or agent for each full or partial day

  • Due Date:  Before training begins.
  • Great American Cookies may charge for additional training for (i) training persons repeating a course or replacing a person who did not pass, (ii) training new employees, and (iii) optional training it provides.
  • You must pay for any travel and living expenses, wages, and other expenses your trainees incur.

13.  Additional Consulting Services:  currently, $300 per employee or agent for each full or partial day, plus their travel and living expenses



  • Due Date:  Within 15 days after services are rendered.
  • Payable if Great American Cookies provides requested consulting services in person at a place other than its offices.

14.  Assigned Trainers:  Great American Cookies’ actual costs and expenses, including travel and living expenses for its trainers

  • Due Date:  Within 10 days of invoice.
  • If you fail to maintain Great American Cookies’ quality and service standards, it may, in its sole judgment, assign trainers to the Store to retrain your employees and restore service levels.

15.  Product, Service, Supplier, and Service Provider Review:  Great American Cookies’ reasonable cost of inspecting the supplier, testing the proposed product, or evaluating the service provider or proposed service, including personnel and travel costs; this cost will not exceed $5,000

  • Due Date:  On demand.
  • Payable if you wish to offer products or use any supplies, equipment, or services that Great American Cookies has not approved, or wish to purchase from a supplier or service provider that Great American Cookies has not approved, whether or not Great American Cookies approves the item, service, supplier, or service provider.

16.  Relocation Charge:  $2,000

  • Due Date:  On demand.
  • Payable if you ask Great American Cookies to review a new proposed site, whether or not it approves the site.

17.  Transfer Fee:  $10,000 for a transfer of your Store or Franchise Agreement

  • Due Date:  At or before transfer.
  • Payable only on transfer of Franchise.
  • Upon the submission of the proposal to transfer, you must pay Great American Cookies a non-refundable deposit of $2,000 in connection with the costs it will incur in evaluating that transfer.
  • If you move forward with the transfer, the deposit will be applied toward the transfer fee.

18.  Transfer Fee for Entity Change:  $1,000

  • Due Date:  At or before transfer.
  • Payable only on transfer of the Franchise Agreement to an entity.

19.  Transfer Referral Fee:  $15,000

  • Due Date:  At closing of the transfer.
  • Under the Transfer Referral Fee Agreement, you may engage Great American Cookies to identify qualified persons who may be interested in purchasing your Franchise.

20.  Successor Fee (Renewal) for Traditional Store and Co-Brand Store:  20% of then-current Franchise Fee

  • Due Date:  On signing a successor Franchise Agreement.
  • You may enter into a successor Franchise Agreement for one additional 10-year term, if you meet certain conditions.

21.  Successor Fee (Renewal) for Satellite Store:  $2,500

  • Due Date:  On signing a successor Franchise Agreement.
  • You may enter into a successor Franchise Agreement for one additional 10-year term, if you meet certain conditions.

22.  Continuing Inventory:  $2,500 to $7,500

  • Due Date:  Within 15 days of demand.
  • Payable to GAC Supply for your purchase of Cookie Ingredients.

23.  Insurance:  cost of the premium, plus a reasonable fee for Great American Cookies’ services in procuring the insurance

  • Due Date:  On demand.
  • Payable only if you fail to maintain the minimum insurance Great American Cookies requires and it chooses to procure the required insurance for you.

24.  Audit:  cost of audit, plus travel and living expenses, plus interest on the amount of the underpayment at an annual rate of the lesser of 18% or the maximum interest rate permitted by law

  • Due Date:  Within 15 days of demand.
  • Payable if audit or review shows an understatement of 3% or more of your Net Sales for any period.

25.  Inspection:  Great American Cookies’ reasonable expenses incurred in inspecting your business, including travel and living expenses, wages, and other expenses for its employees; this cost will not exceed $5,000

  • Due Date:  On demand.
  • Payable if inspection is needed due to your repeated or continuing failure to comply with any provision of the Franchise Agreement.

26.  Convention or Meeting Attendance:  as Great American Cookies determines based on its costs of holding the convention or meeting

  • Due Date:  On demand.
  • Great American Cookies does not currently charge an attendance fee, but it reserves the right to do so.

27.  Remedial Expenses:  Great American Cookies’ reasonable expenses incurred in correcting your operational deficiencies; this cost will not exceed $10,000 per deficiency

  • Due Date:  On demand.
  • Payable if Great American Cookies corrects deficiencies that it has identified during a site inspection and that you failed to correct within a reasonable time after notice from Great American Cookies.

28.  Enforcement Expenses:  Great American Cookies’ reasonable cost of de-identifying your Store; this cost will not exceed $10,000

  • Due Date:  On demand.
  • Payable if your Franchise Agreement expires or is terminated, you fail to de-identify your Store, and Great American Cookies takes steps to do so.

29.  Indemnification:  Great American Cookies’ liabilities, fines, losses, damages, costs, and expenses (including reasonable attorneys’ fees) (“Losses”)

  • Due Date:  On demand.
  • Payable if Great American Cookies incurs Losses due to your activities under the Franchise Agreement or your activities relating to the Store.

30.  Liquidated Damages:  varies under the circumstances

  • Due Date:  On demand.
  • Payable if Great American Cookies terminates your Franchise Agreement based on your default or if you terminate the Franchise Agreement in violation of its terms.

31.  Test Products:  $50 to $500

  • Due Date:  On demand.
  • If Great American Cookies requires, you must participate in market research programs or test marketing of new products and services and must purchase a reasonable quantity of the test products.

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