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Considering The Goddard School Franchise? Don’t Overlook These 28 Important Franchise Fees

by Franchise Chatter on October 11, 2017

in Child-Related Franchises, Childcare Franchise, Education Franchise, Franchise Fees



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

Goddard School Exterior Photo by sqwynch

If you are considering The Goddard School franchise, don’t get blindsided by these 28 important franchise fees (from the initial license fee, to the royalty fee, to 26 other fees found in Items 5 and 6 of The Goddard School’s 2017 FDD).

1.  Initial License Fee:  $135,000



  • You must pay an initial license fee of $135,000. The initial license fee consists of an initial deposit of $20,000, which you must pay when you sign the Preliminary Agreement. The remaining $115,000 is payable in two installments, $50,000 when you sign the Franchise Agreement and $65,000 when you receive the Opening Invoice.
  • If, for any reason, you sign a Franchise Agreement without signing a Preliminary Agreement, you must pay $70,000 when you sign the Franchise Agreement and $65,000 when you receive the Opening Invoice.
  • The initial license fee is not refundable once you sign the Franchise Agreement.

2.  Royalty Fee:  7% of Gross Receipts of the School. The royalty fee is reduced during the first year to 2% of Gross Receipts for months 1-3, 4% for months 4-6, and 6% for months 7-12, if you are an existing franchisee purchasing an additional (new) franchise for a reduced initial license fee.

  • Due Date:  Payable monthly on 3rd business day of each month on Gross Receipts for the preceding month.
  • If you qualify and participate in The Goddard School’s incentive program for existing franchisees purchasing an additional (new) franchise, the reduced royalty fee is personal to you. The regular royalty rate of 7% will apply if you transfer your School before it has operated for one year.

3.  Advertising Contribution:  $3,000 or 4% of Gross Receipts, whichever is higher, per month

  • Due Date:  Payable monthly at same time monthly royalty fee is due.
  • The Goddard School may designate an affiliate to administer the advertising and promotional programs for it. Currently, The Goddard School’s affiliate Brooks Advertising, LLC administers the advertising and promotional programs for it.

4.  Telephone Charges, Print and Online Business Listings Advertising:  cost of telephone services and advertising

  • Due Date:  As incurred, payable to The Goddard School or the vendor.

5.  Local Advertising, Marketing, and Promotion:  your cost

  • Due Date:  As incurred, payable to The Goddard School or the vendor.

6.  Financial Statement Audit:  your accountant’s fees for audited financial statements

  • Due Date:  Payable to your accountant, as incurred.
  • The Goddard School may request that any calendar or fiscal year financial statements you must provide to it be audited, at your sole expense, by an independent certified public accountant.

7.  Audit Expenses:  cost of audit, including the charges of any independent accountant and the travel expenses, including food, transportation, and lodging, and compensation of The Goddard School’s employees



  • Due Date:  Upon receipt of audit report.
  • Payable only if (i) audit discloses an understatement of your Gross Receipts, or (ii) if you fail to produce all books and records to be audited at the time specified by The Goddard School, or (iii) you previously failed to submit to The Goddard School the forms, reports, records, information, and/or data you were required to submit.

8.  Late Reporting Fee:  $250 for each and every failure and/or refusal to comply, plus $100 per day beginning on the third day

  • Due Date:  Payable following each failure or refusal to comply with reporting requirements and notification requirements.
  • Payable if you fail to (a) timely notify The Goddard School and/or deliver copies to it of any adverse action or order which may adversely affect any permit, certificate, or license; the operation of the School; or your financial condition, or (b) timely submit to The Godddard School any of the forms, reports, records, information, and/or data you are required to submit to The Goddard School.

9.  Transfer Initial Training and Assistance Fee (on-site field and technical): $10,000, subject to annual increase of 10%

  • Due Date:  Before effective date of transfer.
  • Payable by buyer upon signing the Franchise Agreement for training and on-site field and technical training.

10.  Transfer Initial Advertising Contributions:  $2,500 to $15,000

  • Due Date:  Before effective date of transfer.
  • Payable by buyer upon signing the Franchise Agreement and is paid to The Goddard School to purchase advertising and promotional materials.
  • The amount will be based on the transferring franchisee’s Agreement and The Goddard School’s review of your proposed plan and assessment of the School’s needs.

11.  Transfer Fee and Sales Commission:  $5,000 transfer assignment fee; 7% sales commission

  • Due Date:  Before effective date of transfer.
  • Transfer fee is payable by the seller when the Franchise Agreement or any interest in the franchise is transferred to cover The Goddard School’s reasonable legal and accounting fees, credit and investigative charges, travel, and other expenses.
  • Sales commission is due if The Goddard School obtains the purchaser, which includes when the purchaser is an existing or former franchisee or is a current director or a party to an existing Preliminary Agreement.

12.  Transfer Security Deposit:  $5,000

  • Due Date:  Before you sign Termination of Franchise Agreement and Mutual Release.
  • Payable by you in connection with the transfer. The Goddard School will hold the security deposit and apply it to pay your obligations if you do not. The Goddard School will refund any excess remaining after 105 days.

13.  Background Check Fee:  The Goddard School’s cost, which The Goddard School currently typically estimates is $3,000 to $5,500 for up to four people, plus $1,500 for each additional person’s background check run at the same time



  • Due Date:  Before effective date of transfer in the event of a transfer, or renewal in the event of renewal, or as incurred if The Goddard School deems additional background checks are necessary or desirable during the term of the franchise.

14.  Director’s Training Fee:  $1,000 to $5,000

  • Due Date:  As incurred, if The Goddard School implements the fee.
  • At this time, The Goddard School does not charge a director’s training fee, but it reserves the right to do so.

15.  Conventions:  reasonable registration fee

  • Due Date:  As incurred.
  • You must also pay the travel expenses, including food, transportation, and lodging.

16.  Interest on Late Payments:  1 1/2% per month or the maximum rate permitted by law

  • Due Date:  As incurred.
  • Any payment or other amount owed The Goddard School or its affiliates under the Franchise Agreement or other agreement or account with The Goddard School or its affiliates will bear interest, compounded monthly after the due date.

17.  Insufficient Funds Fees and Other Financial Institution Charges:  the greater of $30 or the amount imposed by the financial institution

  • Due Date:  As incurred.

18.  Insurance; Insurance Reimbursement:  policy cost, plus reasonable fee for The Goddard School’s services, including its costs and expenses, if it obtains insurance

  • Due Date:  As incurred.
  • You must obtain and maintain the insurance coverages The Goddard School specifies. If you do not obtain the required insurance coverage, The Goddard School may secure coverage for you and charge you for its services, including its costs and expenses.
  • The Goddard School estimates the cost of insurance to be approximately $15,000 to $18,000 per year.

19.  Rent for Premises of School:  will vary under circumstances

  • Due Date:  Monthly.
  • Although The Goddard School and its affiliates generally do not sublease the School premises to you, if it does so, your rent under a sublease may exceed the rent paid by The Goddard School or its affiliate to the prime landlord.

20.  Maintenance/Refurbishing/Replacement:  as specified

  • Due Date:  Maintenance as needed; refurbishing at The Goddard School’s request but not more than once every 3 years.
  • Maintenance may include periodic repainting, repairs, and replacement of impaired or obsolete existing improvements, indoor and outdoor equipment, and signs.
  • Refurbishing may include structural changes, remodeling, redecorating, replacements, modifications, and additions to existing improvements, indoor and outdoor equipment, and signs to conform to The Goddard School’s then-current standards and trade dress.

21.  Site Development Assistance Fee:  up to The Goddard School’s then-current site development assistance fee offered for new franchises; its current fee is $30,000

  • Due Date:  At The Goddard School’s request.
  • The Goddard School may charge you a reasonable fee, up to the amount of its then-current site development assistance fee, for its services in connection with any relocation, expansion, annexes, and material alterations of the School.

22.  Software Modifications, Enhancements, and Other Maintenance and Support Services:  as specified

  • Due Date:  At The Goddard School’s request, within 30 days following notice of the fee and it may withdraw the amount from your operating account pursuant to your pre-authorized draft forms.
  • The Goddard School may charge a reasonable systems fee for modifications and enhancements made to its computer and telephone systems (both hardware and software) and its proprietary software that it will assess based on an apportionment among its franchisees.

23.  Appraisal Fees:  the cost of your appraiser and one half of the cost of any third appraiser’s fees

  • Due Date:  As incurred, payable to the appraiser.
  • If a question of valuation is decided by any appraisers because The Goddard School and you cannot agree in connection with its right to purchase certain assets or to lease the School premises, The Goddard School and you will each pay for your respective appraisers and share the cost of any third appraiser.

24.  De-Identify Premises:  costs, plus reasonable administrative fee

  • Due Date:  As incurred.
  • If you don’t de-identify the School premises following expiration or termination of the Franchise Agreement (if The Goddard School doesn’t elect to lease the premises), it may re-enter the premises and do so at your expense and charge you a fee.

25.  Litigation Expenses:  The Goddard School’s attorneys’ fees, court costs, expert fees, and litigation expenses

  • Due Date:  As incurred.
  • The Goddard School may recover its costs in any action to enforce or defend its rights under the Franchise Agreement.

26.  Taxes:  amount of taxes

  • Due Date:  As incurred.
  • If any taxing authority imposes any sales, gross receipts, or other tax, levy, or assessment on any payments you make to The Goddard School, you must pay the amount assessed, or reimburse The Goddard School if it must pay the taxes directly.

27.  Late Crisis Notification Fee:  $2,500 for each and every failure to notify, plus $500 per day beginning on the second day

  • Due Date:  As incurred.
  • Because of the potential damage to the System and the goodwill associated with the Proprietary Marks, if you fail to alert The Goddard School immediately of any potential crisis situation, including any allegation or occurrence of abuse, neglect, or mistreatment of a child; any allegation or discovery that a child has been released to an unauthorized person; any occurrence of unlawful conduct in the School; any allegation or discovery of any hazardous substance associated with the School; or any outbreak of serious illness associated with the School, after you know or should reasonably know of the existence of the potential crisis, you will pay The Goddard School a late crisis notification fee to compensate for its added crisis-management efforts resulting from the late notification.

28.  Indemnification:  amount of loss or damages, plus costs

  • Due Date:  As incurred.
  • You must indemnify The Goddard School, its subsidiaries and affiliates, and its/their respective officers, directors, managers, members, partners, shareholders, employees, and independent contractors against all claims arising from your ownership, operation, or occupation of the School, as well as all costs, including attorneys’ fees, of defending against them.

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