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Considering a Fuzzy’s Taco Shop Franchise? Don’t Overlook These 25 Important Franchise Fees

by Franchise Chatter on September 21, 2017

in Franchise Fees, Mexican Restaurant Franchise



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If you are considering a Fuzzy’s Taco Shop franchise, don’t get blindsided by these 25 important franchise fees (from the initial franchise fee, to the royalty fee, to 23 other fees found in Items 5 and 6 of Fuzzy’s Taco Shop’s 2017 FDD).

1.  Initial Franchise Fee:  $35,000



  • When you sign a Franchise Agreement, you will pay Fuzzy’s a $35,000 initial franchise fee if you are developing your first Restaurant, $30,000 if you are developing your second Restaurant, and $25,000 if you are developing your third or subsequent Restaurant.
  • The initial franchise fee is considered fully earned by Fuzzy’s and nonrefundable upon payment.
  • Fuzzy’s offers qualified veterans who enter into a multi-unit Franchise Development Agreement for at least 3 Restaurants a discounted initial franchise fee of $17,500 for the first Restaurant to be developed, $27,000 for the second Restaurant to be developed, and $22,500 for each additional Restaurant to be developed.

2.  Development Fee:  varies

  • At the time you sign a Franchise Development Agreement, you must pay Fuzzy’s the entire initial franchise fee for 50-100% of the Restaurants you agree to develop (your “Development Fee”).
  • The number of initial franchisee fees Fuzzy’s requires you to pay as your Development Fee will vary depending upon the number of Restaurants to be developed, your financial resources, and the demographics of your Development Area.
  • Within 30 days after opening each Restaurant under your Franchise Development Agreement, you must pay Fuzzy’s the initial franchise fee for the subsequent Restaurant you have agreed to develop, if you did not do so at the time you signed the Franchise Development Agreement, regardless of your deadline for signing a Franchise Agreement for that Restaurant.
  • Fuzzy’s typically requires a commitment of 5 to 10 Restaurants under a Franchise Development Agreement; therefore, the typical Development Fee will range from $90,000 to $265,000.
  • The Development Fee is considered fully earned and nonrefundable upon payment.

3.  Site Evaluation Fees:  $0 to $500

  • Fuzzy’s may from time to time retain the services of, or enter into master contracts with, certain providers of site evaluation products and services. If Fuzzy’s enters into such a relationship, it may require you to use the services of that supplier to evaluate the sites you propose for your Restaurant.
  • Fuzzy’s does not currently require you to use a designated supplier of site evaluation products and services. If Fuzzy’s enters into such a relationship in the future, it estimates the fee to you will range from $0 to $500 for each site.

4.  Grand Opening Advertising:  $5,000 to $15,000

  • You must pay Fuzzy’s an amount it approves, and specifies in your Franchise Agreement prior to your signing it, in accordance with the Standards to promote the opening of your Restaurant.
  • Fuzzy’s estimates that your costs of grand opening advertising will range from $5,000 to $15,000, which it will determine based on your Restaurant’s market area demographics and competition.
  • Fuzzy’s will spend it to promote your Restaurant. It will employ the strategies and expenditures it deems appropriate for your grand opening advertising program.

5.  Royalty Fee:  3.5% of Gross Sales during the first 52 weeks of operation; 5% of Gross Sales thereafter

  • Due Date:  Weekly, payable each Tuesday for the preceding week’s sales.

6.  Development Fund:  2% of Gross Sales

  • Due Date:  Weekly, payable each Tuesday for the preceding week’s sales.

7.  Advertising Cooperative:  amount determined by majority vote of cooperative (each Restaurant getting one vote, including company and affiliate-owned Restaurants)



8.  Merchandise for Resale; Equipment; Décor Items:  reasonable cost

  • Due Date:  On demand.
  • Fuzzy’s may provide to you at a reasonable cost certain merchandise for resale that identifies the system; for example, caps and t-shirts, equipment, and decor items.

9.  Technology Fee:  Fuzzy’s then-current fee (currently $170 per month)

  • Due Date:  Monthly.
  • May be increased up from time to time.

10.  POS Support Fee:  Fuzzy’s then-current fee (currently $120 per month for the first terminal, plus $10 per month for each additional terminal)

  • Due Date:  Monthly.

11.  Mobile App, Online Ordering, and Loyalty Fee:  Fuzzy’s then-current fee (currently $150 per month)

  • Due Date:  Monthly.

12.  Site Evaluation Fee:  Fuzzy’s then-current fee (currently $0)

  • Due Date:  On demand.
  • Payable only if Fuzzy’s requires you to use a designated supplier of site evaluation services; for the second or subsequent site you propose.

13.  Opening Assistance:  reimbursement of Fuzzy’s travel, lodging, and dining costs for trainers who provide assistance and, if Fuzzy’s deems it necessary to provide support for your second or subsequent Restaurant, its then-current training fee (currently, $330 per trainer per day)



  • Due Date:  On demand.

14.  Additional/Remedial Training:  Fuzzy’s then-current training fee (currently, $330 per trainer per day), plus reimbursement of travel, lodging, and dining costs

  • Due Date:  Before training.

15.  Relocation Fee:  Fuzzy’s then-current fee (currently $2,500)

  • Due Date:  Before relocation.
  • Payable only if Fuzzy’s requests and it approves your relocation.

16.  Renewal Fee:  $5,000

  • Due Date:  Before renewal.
  • Payable only if you request and Fuzzy’s approves your relocation.

17.  Transfer Fee:  either (i) 50% of Fuzzy’s then-current initial franchise fee if transferee is not a current franchisee, or (ii) $7,500 if transferee is a current franchisee; and reimbursement of related legal costs

  • Due Date:  Before transfer.

18.  Supplier Testing Costs:  reimbursement of Fuzzy’s costs and expenses for inspection and testing

  • Due Date:  On demand.
  • Payable only if you request approval of a new supplier.

19.  Manual Replacement Fee:  Fuzzy’s then-current fee (currently $500)

  • Due Date:  On demand.
  • Payable only if you lose or misplace the Manual loaned to you by Fuzzy’s.

20.  Audit Costs:  cost of audit

  • Due Date:  On demand.
  • Payable only if audit was necessary because you failed to report to Fuzzy’s or if audit reveals an understatement of 2% or more of any amount required to be reported to Fuzzy’s.

21.  Insurance premium:  reimbursement of Fuzzy’s cost of the premium, plus administrative fee equal to 10% of the annual premium

  • Due Date:  On demand.
  • Payable only if you fail or refuse to maintain required insurance coverage and Fuzzy’s procures coverage for you.

22.  Indemnification:  an amount equal to the value of all losses and expenses that Fuzzy’s incurs

  • Due Date:  On demand.
  • You must reimburse the amount of Fuzzy’s damages and pay its attorneys’ fees and related costs if it is held liable for claims from your operation of your Restaurant.

23.  Nonsufficient Funds Fee:  Fuzzy’s then-current fee, not to exceed $100 (currently, $100)

  • Due Date:  On demand.
  • Payable only if there are insufficient funds in your account to process payment of fees due to Fuzzy’s.

24.  Interest/Late Fee:  the lesser of 18% per year or the highest rate of interest permitted by the jurisdiction in which your Restaurant is located

  • Due Date:  On demand.
  • Payable only if you fail to make payments by the applicable due date.

25.  Collection Fees and Costs:  reimbursement of Fuzzy’s costs and expenses incurred in enforcing the agreement, including, among others, commissions to collection agencies, legal expenses, costs of creating or replicating reports, court costs, expert witness fees, discovery costs, and interest charges on the foregoing

  • Due Date:  On demand.

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