Considering a Great Harvest Bread Company Franchise? Don’t Overlook These 19 Important Franchise Fees

If you are considering a Great Harvest Bread Company 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 Great Harvest Bread Company’s 2017 FDD).

1.  Initial Franchise Fee:  $20,000 to $30,000

• The initial franchise fee Great Harvest charges you depends on the size of the Exclusive Territory it grants you (measured by population).

• Except as described below, the initial franchise fee is $30,000 for an Exclusive Territory covering 100,000 to 150,000 people, $25,000 for an Exclusive Territory covering 50,000 to 99,999 people, and $20,000 for an Exclusive Territory covering less than 50,000 people.

• You must pay the franchise fee when you sign the Franchise Agreement.

• Great Harvest offers a 15% discount for honorably-discharged veterans of the United States Armed Forces who control at least 50% of the Bread Company when the Franchise Agreement is signed.

2.  Initial Training:  $2,500 for each additional person, after the first 2, attending the initial training program

• Great Harvest provides initial training for 2 people at no additional charge. It charges you $2,500 for each additional person attending the initial training program. This payment is not refundable.

3.  Layout Revisions:  currently $65 per hour

• Great Harvest provides 2 Bread Company layout revisions as part of your franchise fee. However, if you request additional assistance beyond what Great Harvest typically gives franchisees, it may charge you its then-current hourly rate for that service (currently $65 per hour). This payment is not refundable.

4.  Continuing Fee:  5% of Bread Company’s monthly Gross Sales

• Due Date:  Due by 15th day of each calendar month on previous month’s Gross Sales.

• “Gross Sales” means the sales of all products, goods, services, and wares, whether for cash or on a charge, credit, or time basis, in connection with your Bread Company’s operation (including coffee and tea sales if you participate in the Peet’s Coffee Program); they do not include sales taxes collected from customers.

5.  Marketing Fee:  2.5% of Bread Company’s monthly Gross Sales

• Due Date:  Due by 15th day of each calendar month on previous month’s Gross Sales.

• Great Harvest does not yet collect Marketing Fund contributions but may do so on 30 days’ prior written notice to you.

6.  Transfer:  Franchise Agreement provides for a $20,000 transfer fee. However, the transfer fee Great Harvest actually charges might be less depending on your situation (for example, how much training transferee needs, or whether transferee already operates in the Great Harvest system as a manager or franchisee). Great Harvest will rebate from $3,000 to $5,000 of transfer fee after required training is completed, transferee buys and installs approved new exterior signage (if applicable), and you return to Great Harvest all Great Harvest confidential information.

• Due Date:  Due when Franchise Agreement is signed.

7.  Additional Training or Assistance:  $40 per hour (plus reasonable expenses)

• Due Date:  As incurred.

• Great Harvest provides initial training for 2 people as part of your initial franchise fee; however, if you request additional assistance beyond what Great Harvest typically gives franchisees, it may charge you for its services.

8.  Renewal Extension:  $3,000

• Due Date:  Before expiration date of your Franchise Agreement.

9.  Relocation:  $5,000

• Due Date:  As incurred.

• Due if you wish to relocate the Bread Company’s premises and Great Harvest is involved in the process.

10.  Hold Harmless:  will vary under circumstances

• Due Date:  As incurred.

• You must reimburse Great Harvest if it is held liable for claims from your Bread Company’s operation.

11.  Liquidated Damages:  Maximum Continuing Fee due under your Franchise Agreement

• Due Date:  As incurred.

• Due during period you violate non-competition provisions.

12.  Mediation:  will vary under circumstances

• Due Date:  As incurred.

• Great Harvest and you will share equally all fees and expenses of mediator and neutral third party mediation organization.

13.  Annual Convention:  $500 or less for registration fee

• Due Date:  Before you attend.

• You will pay convention fee and your own expenses to attend Great Harvest’s optional yearly convention.

14.  Audit Costs: costs incurred in conducting audit (depends on extent of your noncompliance but should not exceed $2,500)

• Due Date:  As incurred.

• Due if you understate Gross Sales by more than 2% or do not send Great Harvest required information.

15.  Interest:  12% per year

• Due Date:  15 days after you receive inspection or audit report.

• Due on overdue amounts.

16.  Taxes:  as required by law

• Due Date:  As incurred.

• You must pay Great Harvest all taxes that it must collect or pay on account of services or goods it provides you or fees it collects from you.

17.  Attorneys’ Fees and Expenses:  will vary under circumstances (depends on extent of your noncompliance)

• Due Date:  As incurred.

• You must reimburse Great Harvest if it incurs these expenses after terminating your franchise for cause.

18.  Mill Dressing:  $400 to $800

• Due Date:  As invoiced.

• Fee paid to Great Harvest for mill dressing provided on-site by an independent contractor of Great Harvest (mill dressing is maintenance where stones are pulled apart for re-sharpening to give them better teeth to grind wheat berries into flour).

19.  Reimbursement of Gift Card Deficiencies:  amount of deficiency (depends on extent of your non-compliance)

• Due Date:  Within 10 days after notice from Great Harvest.

• You must reimburse Great Harvest for any deficiencies in your gift card bank account that it covers for you.