If you are considering a Learning Express Toys franchise, don’t get blindsided by these 21 important franchise fees (from the initial franchise fee, to the royalty fee, to 19 other fees found in Items 5 and 6 of Learning Express Toys’ 2017 FDD).

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

• The initial franchise fee which you must pay to Learning Express Toys under the Franchise Agreement is $35,000.

• The initial franchise fee is payment, in part, for expenses incurred by Learning Express Toys in furnishing assistance and services to you and for costs incurred by it, including sales and marketing expenses, training, legal, accounting, and other professional fees.

• You will pay $5,000 (the “Reservation Fee”), sign Learning Express Toys’ Reservation Agreement, and provide Learning Express Toys a preliminary Funding Plan to begin the process of selecting a site.

• Upon receipt of the signed Reservation Agreement, Reservation Fee, and preliminary Funding Plan, Learning Express Toys or its designee will assist you with local evaluation, site selection, and lease negotiations.

• It is your sole responsibility, however, to secure the premises for your Local Store Franchise. You have 180 days from the date Learning Express Toys receives your Reservation Agreement to sign a lease.

• If a lease is not signed by the end of that 180-day period, Learning Express Toys may extend, at its sole option, the termination date of the Reservation Agreement. If you cannot locate a suitable site for your Local Store Franchise, Learning Express Toys will refund your Reservation Fee in full. The Reservation Agreement will terminate, and you will have no further rights to become a Local Store Franchisee.

• Upon signing the Local Store Franchise Agreement, the $30,000 balance of the initial franchise fee will be due in a lump sum, along with your final Funding Plan and documentation verifying source of funds.

• Learning Express Toys is a member of the International Franchise Association (“IFA”) and participates in the IFA’s VetFran Program, which provides special financial incentives to qualified veterans. The financial incentive is a $5,000 discount on the initial franchise fee for your first franchise only.

• If you purchase additional Local Store Franchises, then the initial franchise fee is $15,000 for each additional Local Store Franchise.

• Learning Express Toys does not offer financing of the initial franchise fee.

• You will start receiving internal communications and access to the Learning Express Toys Intranet site, which contains the support and training materials necessary for operating your Local Store Franchise, including the Grand Opening Manual.

• You will attend the New Store Owner Training Program at the Home Office in Devens, Massachusetts after signing your Franchise Agreement. Your Local Store Franchise Agreement for the Local Store Franchise must be signed prior to the commencement of your New Store Owner Training.

• Once you have paid the initial franchise fee in full, it is not refundable for any reason. This fee is uniform for all franchisees acquiring their first franchise under the 2017 Disclosure Document.

2.  POS Software Corporate License Access Fee:  $4,950

• You will pay a $4,950 corporate license access fee for the POS software.

3.  Royalty Fee:  5% of Gross Receipts

• Due Date:  Monthly Sales Report due to Learning Express Toys by the 3rd of the month.

• Royalties are payable monthly on the 15th day of each subsequent month.

• Gross Receipts includes all revenues received by you.

4.  Advertising:  1% of Gross Receipts, if Learning Express National Advertising Fund is formed

• Due Date:  Learning Express National Advertising Fund contribution collected monthly with the Royalty.

• No fee is currently assessed. A 60-day notice will be given before the advertising fund begins.

5.  Additional Assistance:  reasonable travel and lodging expenses

• Due Date:  When billed.

• Only if operational problems require a considerable level of additional support.

6.  Gift Cards, Merchandise Credit Cards, and Gift Card Holders:  $150, $120, and $50, respectively

• Due Date:  As incurred.

• Payable to Learning Express Toys.

• Sold in 500 piece increments.

• Learning Express Toys reserves the right to adjust this fee after the first 12 months based on a change in circumstance (for example, a change in market rates for similar services, or increased costs from the vendor or third party).

7.  Gift Card Processing Fee:  $34 monthly

• Due Date:  Monthly

• Paid to Service Provider.

8.  Email Marketing Service:  $25 to $100 monthly

• Due Date:  As invoiced.

• Payable to Learning Express Toys.

• Learning Express Toys reserves the right to adjust this fee after the first 12 months based on a change in circumstance (for example, a change in market rates for similar services, or increased costs from the vendor or third party).

9.  Audit Costs:  cost of examination

• Due Date:  Immediately after audit.

• Payable to Learning Express Toys; payable only if the audit is necessary due to your failure to furnish reports or other information as required, or to furnish these items on a timely basis, or if Learning Express Toys’ examination reveals an underpayment of the amount due.

10.  Transfer Fee:  $15,000

• Due Date:  On or before date of transfer.

• Payable to Learning Express Toys from buyer upon transfer of franchise.

• Non-refundable.

11.  Franchise Renewal Fee:  none

• Due Date:  Not applicable.

12.  Costs and Attorney’s Fees:  will vary under circumstances

• Due Date:  As incurred.

• You are responsible for Learning Express Toys’ costs and attorney’s fees if it incurs them in a lawsuit it wins or if it gets an injunction against you.

• You must pay Learning Express Toys all damages, costs, and expenses, including all court costs, arbitration costs, and reasonable attorneys’ fees and other expenses it incurs in enforcing any obligations or in defending against any claim, demand, action, or proceeding relating to the Franchise Agreement, including the obtaining of injunctive relief.

13.  Indemnification:  will vary under circumstances

• Due Date:  As incurred.

• You have to reimburse Learning Express Toys if it is held liable for claims arising from your operation of your Local Store Franchise.

14.  Late Payment (Interest):  3% per month or the maximum interest rate permitted by state law, whichever is less, on all amounts due Learning Express Toys not paid on time

• Due Date:  Upon demand.

• Payable to Learning Express Toys; applies to past due Royalty Fees, catalogs, postcards, other marketing pieces, or other charges.

15.  CounterPoint Enhancement Fee:  $250 annually

• Due Date:  As invoiced.

• Payable to Learning Express Toys.

• Learning Express Toys reserves the right to adjust this fee after the first 12 months based on a change in circumstance (for example, a change in market rates for similar services, or increased costs from the vendor or third party).

16.  Shared Server Fee:  $180 annually

• Due Date:  As invoiced.

• Payable to Learning Express Toys.

• Learning Express Toys reserves the right to adjust this fee after the first 12 months based on a change in circumstance (for example, a change in market rates for similar services, or increased costs from the vendor or third party).

17.  POS Software Support & Hosting Services:  $100 monthly

• Due Date:  As invoiced.

• Paid to Service Provider.

18.  External Credit Card Terminals:  $800 (non-signature capture) or $1,200 (signature capture)

• Due Date:  One-time fee.

• Paid to Service Provider.

19.  QuickBooks Online Fee:  $18.90 monthly

• Due Date:  As invoiced.

• Paid to Service Provider.

20.  E-commerce Order Fee (optional participation):  7% of web orders fulfilled by your Store

• Due Date:  Monthly.

• After you fulfill a web order, LE Toys Dot Com, Inc. will reimburse you for the amount of the E-commerce sales less the E-commerce Order Fee, Royalty Fee, and credit card fees.

21.  Music Subscription Service:  $35 monthly

• Due Date:  As invoiced.

• Paid to Service Provider.