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Considering a World of Beer Franchise? Don’t Overlook These 27 Important Franchise Fees

by Franchise Chatter on October 28, 2017

in Bar Franchise, Franchise Fees



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

If you are considering a World of Beer franchise, don’t get blindsided by these 27 important franchise fees (from the initial franchise fee, to the royalty fee, to 25 other fees found in Items 5 and 6 of World of Beer’s 2017 FDD).

1.  Initial Franchise Fee:  $45,000 to $50,000



  • The initial franchise fee for each Tavern is $50,000. You must pay the initial franchise fee at the time you sign the Franchise Agreement (less any applicable development fee credit as described below).
  • If you sign an Area Development Agreement to develop more than one World of Beer Tavern, the initial franchise fee for your second and each subsequent Tavern is $45,000.
  • All initial franchise fees are earned when paid and are non-refundable.

2.  Development Fee:  the sum of (a) the initial franchise fee for your first Tavern and (b) ½ the initial franchise fee for your second and each subsequent Tavern to be developed under the development schedule

  • If you intend to develop more than one World of Beer Tavern, you will sign an Area Development Agreement.
  • You must pay a development fee that World of Beer will determine based upon the number of Taverns required under the development schedule. The number of Taverns required by the development schedule will be determined by a number of factors, such as the size and population of the Development Area, and your financial capacity and expertise in developing Taverns.
  • The development fee is equal to the sum of (a) the initial franchise fee for your first Tavern and (b) ½ the initial franchise fee for your second and each subsequent Tavern to be developed under the development schedule.
  • You must pay the development fee when you sign the Area Development Agreement. When paid, the development fee is fully earned and non-refundable.
  • The balance of the initial franchise fee for each Tavern is due when the lease is signed for such Tavern, which will not be less than 120 days prior to the date the Tavern must be open and operating in accordance with the development schedule.
  • You will sign a Franchise Agreement for your first Tavern when you sign the Area Development Agreement. If you abide by the development schedule, the portion of the development fee allocable to each Tavern (which is $50,000 for your first Tavern and $22,500 for each remaining Tavern) will be credited against the initial franchise fee due when the Franchise Agreement for that Tavern is signed.

3.  Initial Training Fee:  no charge for you (or your Operating Principal) and one other person

  • World of Beer will provide initial training for you (or your Operating Principal) and one other person, at no charge to you, except that you are responsible for the expenses incurred by such trainees in attending the initial training program, including transportation, lodging, meals, and wages.
  • World of Beer may require you to pay it a training fee of $7,500 for each additional person or replacement trainee that attends its initial training program. You will be responsible for all travel and living expenses associated with such training for such individuals.
  • All training costs are nonrefundable. Training fees and costs are determined uniformly among franchisees.

4.  Royalty Fee:  5% of Net Sales or $1,731 per week, commencing with the first full calendar month after your Tavern opens for business

  • Due Date:  On or before the fifth day of each month for the preceding month’s Net Sales.
  • If applicable law prohibits payments to World of Beer based on sales of alcohol and beverage products, then you must pay World of Beer a monthly Royalty Fee equal to $1,731 per week.
  • Payments may be withdrawn by electronic funds transfer from your designated bank account.

5.  Marketing Contributions:  1.5% to 3% of Net Sales or $865 per week

  • Due Date:  Same as Royalty Fee.
  • The Marketing Contribution may vary in different markets.
  • If applicable law prohibits payments to World of Beer based on sales of alcohol and beverage products, then you must contribute $865 per week to the Marketing and Development Fund.
  • Contributions may be withdrawn by EFT from your designated bank account.

6.  Local Advertising:  0.5% to 1.5% of Net Sales

  • Due Date:  Quarterly, as incurred.
  • You must spend at least 0.5% of Net Sales on approved local advertising for your Tavern during each calendar quarter, payable to suppliers of advertising. You may spend more at your discretion.

7.  Cooperative Advertising:  up to ½ of the Local Advertising requirement may be re-designated for Cooperative Advertising



  • Due Date:  As directed.
  • World of Beer may establish a Cooperative Advertising program within your regional marketing area.
  • Payable to World of Beer or an advertising cooperative.

8.  Grand Opening Advertising:  $5,000

  • Due Date:  Period beginning 30 days before and ending 60 days after the Tavern’s opening date.
  • World of Beer prescribes (in the Manuals) the required public relations, marketing, and advertising you must undertake in connection with the opening of the Tavern.

9.  MIS Fees:  varies, currently $350 per month

  • Due Date:  As invoiced.
  • World of Beer charges this fee for modifications and enhancements made to proprietary software it licenses to you or other Computer System maintenance and support services it or its affiliates furnish.
  • The amount of this fee is subject to change.

10.  Audit:  reasonable costs and expenses of audit

  • Due Date:  As invoiced.
  • Audit costs payable only if the audit shows an understatement of more than 2%.

11.  Late Fees:  10% of the amount due

  • Due Date:  After due date; with late payment.
  • Applies to all Royalty Fees, Marketing Contributions, and other amounts due to World of Beer.
  • Late fees are intended to reimburse World of Beer for the time and effort it spends collecting unpaid amounts. They do not constitute interest, as you do not have the right to defer payment.

12.  Interest:  lesser of 18% per annum or the highest contract rate of interest allowed by law

  • Due Date:  On demand.
  • Payable on all overdue amounts.

13.  Late Report Fee:  $150 per late report per week (or portion thereof) past the due date



  • Due Date:  On demand.
  • If any of the financial reports (or other related reporting information required in the Franchise Agreement) are not received by World of Beer by the required deadlines, it may charge you a late submission fee equal to $150 for each week (or portion thereof) that such report remains outstanding.

14.  Transfer Fee:  ½ of then-current Franchise Fee; 10% of then-current Franchise Fee if transfer is to an existing franchisee (FA); $5,000 for each Tavern for which a Franchise Agreement has not been executed, plus the transfer fees required under all executed Franchise Agreements (DA)

  • Due Date:  Payable upon transfer.
  • This transfer fee does not apply to an assignment of interest to an entity controlled by you.

15.  Successor Franchise Fee:  $5,000

  • Due Date:  Payable when you sign Successor Franchise Agreement.
  • You must satisfy all conditions for the grant of a Successor Franchise stated in the Franchise Agreement.

16.  Training and Assistance Fees:  $7,500 per person trained

  • Due Date:  As invoiced.
  • World of Beer provides initial training for you (or your Operating Principal in the event you are a business entity) and one other person you select without additional charge. You are responsible for all travel and living expenses incurred by such persons while attending training.
  • World of Beer reserves the right to charge you a training fee if it provides initial training for any additional persons or any replacement trainees. It may also charge its then-current standard fees if it trains any successor manager, if it provides periodic or refresher training for your managerial employees or other employees, or if it provides any ongoing training at your request.

17.  On-Site Opening Assistance:  currently $150 to $300 per trainer per day, plus travel and living
expenses

  • Due Date:  As invoiced.
  • World of Beer provides on-site assistance at your Tavern for 5 to 15 days, at its expense, to provide guidance and assistance in connection with opening and day-to-day operations for your Tavern.
  • If you request additional assistance, or World of Beer determines that additional assistance is necessary, to facilitate the opening of the Tavern, World of Beer may charge its then-current standard rates, plus expenses, for such additional on-site assistance and support.
  • World of Beer may also charge these fees if it provides, upon your request or as it considers appropriate, any additional guidance and assistance in the operation of your Tavern, including remedial training for your personnel at the Tavern.

18.  Conference Registration Fees:  not currently charged, but World of Beer estimates these fees will range from $0 to $500

  • Due Date:  As invoiced.
  • World of Beer may hold an annual conference and up to 4 quarterly conferences per calendar year and charge you a reasonable fee to cover the costs and expenses of such conferences.

19.  Manuals:  $500

  • Due Date:  At time of purchase.
  • Cost of replacement copy if your hard copy is lost or destroyed.

20.  Supplier Approval:  cost of inspection or testing. World of Beer estimates these costs will range from $0 to $500.

  • Due Date:  As invoiced.
  • World of Beer may require you to pay it or an independent laboratory for the cost of inspection or testing if you desire to purchase or lease items to be used in the Tavern from sources it has not previously approved.

21.  Management Fee:  $2,500 per week

  • Due Date:  As agreed.
  • Payable during the period that World of Beer’s appointed manager manages the Tavern upon your death or disability.

22.  Relocation Fee:  20% of then-current Franchise Fee

  • Due Date:  As invoiced.
  • The relocation fee is to reimburse World of Beer for expenses it incurs in connection with the relocation of your Tavern.

23.  Indemnification:  all costs including attorney’s fees

  • Due Date:  On demand.
  • You must indemnify World of Beer when certain of your actions result in loss to it under the Agreements.

24.  Enforcement Costs:  all costs including attorney’s fees

  • Due Date:  On demand.
  • You will reimburse World of Beer for all costs in enforcing obligations if it prevails.

25.  Insurance:  amount of unpaid premiums, plus an administrative fee

  • Due Date:  As invoiced.
  • Payable only if you fail to maintain required insurance coverage and World of Beer elects to obtain coverage for you.

26.  Insufficient Funds Charge:  $150 for each occurrence, plus applicable bank service charges

  • Due Date:  On demand.
  • Payable if your check is dishonored or there are insufficient funds in bank account when World of Beer drafts the bank account for amounts due to it, or any other insufficient funds items you tender to it.

27.  Legal Expenses:  cost of legal expenses

  • Due Date:  On demand.
  • Payable to reimburse World of Beer for its legal expenses in connection with its review of any proposed advertising, promotion, or marketing materials for your Tavern.

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