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Earnings Claims of Top Franchises Revealed

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Considering a Pinkberry Franchise? Don’t Overlook These 36 Important Franchise Fees

by Franchise Chatter on September 14, 2017

in Franchise Fees, Frozen Yogurt Franchises

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

Pinkberry Frozen Yogurt Franchise Photo by mezzoblue

If you are considering a Pinkberry franchise, don’t get blindsided by these 36 important franchise fees (from the initial franchise fee, to the royalty fee, to 34 other fees found in Items 5 and 6 of Pinkberry’s 2017 FDD).

1.  Initial Franchise Fee:  $55,000

  • You must pay an Initial Franchise Fee of $55,000 (“Initial Franchise Fee”) in a lump sum when you sign the Franchise Agreement.
  • If you are currently an active or active reserve member of the U.S. Armed Forces, have been honorably discharged from the U.S. Armed Forces (“Eligible Military”) or are a 501(c)(3) organization (“501(c)(3)”), you will receive a 20% discount on the Initial Franchise Fee.
  • There are no refunds of Initial Franchise Fees under any circumstances. Pinkberry may periodically reduce the Initial Franchise Fee in connection with limited time promotions, new concepts and/or operational programs.
  • Pinkberry may vary the terms of its franchises in connection with testing new marketing, branding, and/or operational programs. These tests are generally conducted with experienced, existing franchisees and may include incentives and other rights which are not available to all franchisees.
  • If you sign the Franchise Agreement in connection with a transfer or renewal, you will not pay the Initial Franchise Fee.

2.  On-Site Opening Assistance:  $7,470 to $9,470

  • You must also pay Pinkberry approximately $7,470 to $9,470, not including transportation costs, for on-site opening assistance. These amounts are not refundable.
  • The amount includes Pinkberry’s current training fee of $350 per day for two trainers for ten days, and reimbursement of lodging and meals for both trainers, which Pinkberry estimates to be approximately $105 per trainer per day ($205 in New York City) during training and $55 per trainer per day during travel. You must also reimburse Pinkberry for transportation costs for both trainers.

3.  Lease Review Fee:  $1,250

  • If, prior to executing your lease, you request Pinkberry or its affiliate to review your lease and provide suggested changes to you, you will pay Pinkberry or its affiliate a $1,250 lease review fee (“Lease Review Fee”) when it agrees to perform the full lease review. The Lease Review Fee is non-refundable.
  • This is an optional service and the decision to use this service is to be made by you in your sole discretion.

4.  License to Sell Additional Products:  $2,500 to $5,000

  • Pinkberry may offer you the option to purchase a license to sell additional signature products in your Pinkberry restaurant and to use the signature products’ trademark(s) as signature products are developed.
  • Pinkberry estimates that the fees associated with acquiring license(s) to sell additional products will be between $2,500 and $5,000 although these license fees may be modified from time to time.

5.  Royalty Fee and Surcharge:  6% of total Gross Sales. Surcharge is a maximum of $10 per week in addition to the Royalty Fee.

  • Due Date:  Withdrawn electronically from your designated bank account on the 10th day of each calendar month.
  • “Gross Sales” include all revenue from the Franchised Business excluding sales tax and authorized refunds, credits, and allowances.

6.  Advertising Fees:  2% of Gross Sales

  • Due Date:  Same as Royalty Fee.
  • The “Advertising Fee” is in addition to the 2% of Gross Sales, which you must spend on local advertising under your Franchise Agreement.

7.  Customer Experience (CSAT) Program Fee:  $30 per month

  • Due Date:  Withdrawn electronically from your designated bank account on the 20th day of each calendar month.
  • You must participate in Pinkberry’s CSAT program, which provides mystery shopper and customer experience feedback services.

8.  Hosted Services Fee:  $115 per month

  • Due Date:  Upon demand.
  • Approved vendor (currently Paytronix).

9.  Additional Persons Training Fee (KTEC):  $250 per person per day

  • Due Date:  Upon demand.
  • The training of two individuals for new owner training at KTEC (Kahala Training & Education Center) in Scottsdale, AZ is included in the Initial Franchise Fee.
  • The Additional Persons Training Fee is for any additional persons who attend the new owner training portion of the initial Training Program.

10.  On-Site Opening Assistance:  $350 per day, reimburse Pinkberry for lodging and meals for two trainers (currently estimated to be $195 per day, or $205 in New York City, per trainer during training and $35 per day per trainer during travel), and reimburse Pinkberry for its employees’ transportation expenses

  • Due Date:  Upon demand (50% before training and balance after store opening).
  • Pinkberry will provide on-site opening training and assistance for 10 days.

11.  Additional Persons Training Fee (In Store):  $350 per day and reimbursement of Pinkberry’s employees’ travel expenses

  • Due Date:  Upon demand.
  • You only pay if Pinkberry provides remedial or additional training which may be mandatory or optional.

12.  Assistance Provided at Your Request:  Pinkberry’s out-of-pocket expenses and its employees’ travel expenses, wages, and other expenses

  • Due Date:  Upon demand.
  • Assistance at your request is at Pinkberry’s discretion and is subject to its scheduling and capacity requirements.

13.  Annual Meeting Registration Fee:  up to $1,000, plus incidental costs to attend

  • Due Date:  60 to 90 days prior to the Meeting.
  • Pinkberry will debit your Depository Account for this fee, which is non-refundable. This fee is charged to all franchisees whether or not they attend the Meeting.

14.  Depository Account:  $3,000 (must be replenished on a regular basis)

  • Due Date:  At signing of Franchise Agreement.

15.  Loyalty Program Fee:  $135 per month

  • Due Date:  Monthly.

16.  Training Cancellation/Rescheduling Fee:  you must pay Pinkberry its then-current per day training fee, plus travel expenses for each day its on-site trainers are on site but unable to train because you are not ready or must otherwise delay the on-site training

  • Due Date:  Upon demand.
  • You only pay if you or any of your employees cancel or reschedule any scheduled onsite assistance without giving Pinkberry prior notice.

17.  Information Systems:  Pinkberry’s then-current reasonable charges. Pinkberry has not begun to collect this fee.

  • Due Date:  Upon demand.
  • Pinkberry may sell, license, or sublicense Information Services provided by it or third parties. Pinkberry cannot presently estimate the charges.

18.  POS System Annual Warranty Service:  $1,000 to $2,000 per annum

  • Due Date:  Upon demand.
  • You must obtain an annual warranty service plan for the POS System.

19.  Music Subscription Service:  $35 per month

  • Due Date:  As billed.
  • You must subscribe to the music subscription service approved by Pinkberry. Pinkberry currently pays for this service from the Marketing Fund.

20.  Data Fees:  up to $75 per month (subject to reasonable annual and/or service enhancement increases). Pinkberry has not yet begun to collect this fee.

  • Due Date:  Same as Royalty. The fee is based on Pinkberry’s costs for providing intranet services and the fee may be periodically adjusted.

21.  POS Help Desk Phone Support Maintenance Contract Fee:  $55 per month

  • Due Date:  Last Thursday of each month.
  • Pinkberry will debit your Depository Account for this fee. This is required if you purchase the POS system but is optional if you purchase any other POS system.

22.  Renewal Franchise Fee:  50% of the then-current initial Franchise Fee

  • Due Date:  When new Franchise Agreement is signed at renewal.
  • Applicable if you renew your Franchise Agreement.

23.  Transfer Franchise Fee:  $7,550, plus Pinkberry’s then-current training fees (and reimbursement of its expenses) if your transferee/assignee must attend Pinkberry’s initial Training Program

  • Due Date:  Prior to completion of transfer.
  • Payable it you are purchasing your Franchised Business as a result of a full transfer from another franchisee.

24.  Relocation Fee:  $500

  • Due Date:  At signing of relocation amendment to Franchise Agreement.
  • Payable if Pinkberry approves the relocation of your store.

25.  Document Administration Fee:  $500

  • Due Date:  Lump sum.
  • Applicable for an Affiliate Transfer, including, but not limited to, a transfer of less than 50% of ownership or control.

26.  Private Offering:  the greater of (a) $5,000 or (b) Pinkberry’s reasonable costs and expenses associated with reviewing the proposed offering

  • Due Date:  Upon submission of your request.
  • Only payable if you offer securities in a private offering.

27.  Default Interest:  $50 plus interest at 1 1/2% per month or maximum legal rate, if less (“Default Rate”)

  • Due Date:  Payable upon assessment.
  • Payable on all overdue amounts.

28.  Late Report Fee:  $100 per report

  • Due Date:  Payable upon assessment.
  • Payable if any required financial statement or report is delinquent.

29.  Collection Costs:  all collection costs, including reasonable attorneys’ fees

  • Due Date:  Payable upon assessment.
  • Payable only if Pinkberry is required to retain an attorney or collection agency to collect delinquent payments from you. Pinkberry will also collect as damages any attorneys’ fees and costs incurred by Pinkberry in defending claims that arise due to your actions as a Pinkberry franchisee.

30.  Non-Sufficient Funds Fee:  $50 for each electronic funds transfer returned for non-sufficient funds; $25 for each check or draft returned for non-sufficient funds

  • Due Date:  Payable upon assessment.
  • Payable only if your electronic funds transfer from your depository account or any check you remit to Pinkberry is returned for non-sufficient funds.

31.  Audit:  cost of audit plus interest at Default Rate on underpayments or the maximum rate permissible by law

  • Due Date:  Payable upon assessment.
  • Payable only if audit is caused by your failure to furnish reports or if audit reveals an understatement of fees or assessment of 5% or more.

32.  New Supplier Approval Fee:  a charge not to exceed the reasonable cost of the inspection and the actual cost of the test, not to exceed $5,000

  • Due Date:  Payable upon assessment.
  • Payable by either you or the proposed supplier.
  • If you request Pinkberry’s approval of a new or alternative supplier.

33.  Non-Participation Fee:  $100 per day

  • Due Date:  Payable upon assessment
  • For failure to participate in local, regional, seasonal, promotional, and other programs, initiative, and campaigns.

34.  Reimbursement of Pinkberry’s Expenditures:  actual expenditures made on your behalf and Pinkberry’s costs and expenses resulting from your default

  • Due Date:  Upon demand.
  • Payable only if Pinkberry advances, pays, or becomes obligated to pay sums on your behalf, or if Pinkberry incurs costs (including internal costs) as a result of your default.

35.  Early Termination Fee:  the average monthly Royalty and Advertising Fees paid for any consecutive 12-month period within the preceding 48-month period multiplied by the number of months remaining in the term of the Franchise Agreement, and the product is divided by 2

  • Due Date:  30 days prior to the early closing of the restaurant.
  • You must provide Pinkberry with 90 days prior written notice of the termination of your Franchise Agreement.

36.  Management Fee:  6% of the Franchised Business’s Gross Sales (in addition to the Royalty Fee and Advertising Fee), plus Pinkberry’s direct out-of-pocket costs and expenses

  • Due Date:  Payable with Royalty and Advertising Fee.
  • If Pinkberry assumes the management of your Franchised Business for any period of time.

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