Updated September 30, 2018.

If you are considering a Sweetwaters Coffee & Tea 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 Sweetwaters Coffee & Tea’s 2018 FDD).

1.  Initial Franchise Fee:  $49,000

• You must pay Sweetwaters an initial franchise fee of $49,000 (the “Initial Franchise Fee”) in connection with your purchase of a single Franchised Business, which must be paid in full upon the execution of your Franchise Agreement.

• The Initial Franchise Fee is deemed fully earned upon execution of your Franchise Agreement and is not refundable under any circumstances.

• Except as provided in this Item, the Initial Franchise Fee is uniform for those purchasing a single franchise.

2.  Initial Training Fee:  $5,000

• You must also pay Sweetwaters an initial training fee amounting to $5,000 (the “Initial Training Fee”), which will cover the tuition associated with you (the franchisee) and 2 other individuals attending Sweetwaters’ proprietary initial training program (the “Initial Training Program”), including the on-site assistance Sweetwaters provides at your Franchised Business on or around the time it opens for business.

• The Initial Training Fee does not cover costs and expenses incurred in attending training, such as travel, lodging, meals, or salaries.

• This fee is due prior to you or any of your designated personnel attending Sweetwaters’ Initial Training Program and is deemed fully earned and nonrefundable upon payment.

• In addition to the Initial Training Fee, you will be responsible for the costs that you and your designated trainees incur in connection with attending the portions of the Initial Training Program that are conducted at Sweetwaters’ headquarters or designated training facility.

3.  Initial Inventory:  $5,000 to $9,900

• Before opening your Franchised Business, you must purchase from Sweetwaters or its affiliates your required opening inventory of branded products (including tea packaging, mugs, apparel, packaged items, labels, brochures, operational forms, and proprietary products) and your required in-store product signage.

• The cost of these initial purchases will range from $5,000 to $9,900. Sweetwaters or its affiliates may require advance deposits for some or all of these purchases. Otherwise, the amounts will be due upon or shortly after delivery.

• Payments for these items are nonrefundable, except in the case of defects in the items sold. This payment is uniform for all franchisees and is required to be paid in a lump sum.

4.  Development Fee:  (i) $69,500 for the right to open 2 Franchised Businesses; (ii) $99,500 for the right to open 3 Franchised Businesses (“3-Pack”); and (iii) $149,500 for the right to open 5 Franchised Businesses (“5-Pack”)

• If Sweetwaters grants you the right to open multiple Franchised Businesses under a Development Agreement, you must pay Sweetwaters a one-time Development Fee upon executing your Development Agreement.

• Your Development Fee will depend on the number of Franchised Businesses Sweetwaters grants you the right to open within the Site Selection Area and is calculated as follows: (i) $69,500 for the right to open 2 Franchised Businesses; (ii) $99,500 for the right to open 3 Franchised Businesses (“3-Pack”); and (iii) $149,500 for the right to open 5 Franchised Businesses (“5-Pack”).

• You will be required to enter into Sweetwaters’ then-current form of Franchise Agreement for each Franchised Business you wish to open under your Development Agreement, but you will not be required to pay any additional Initial Franchise Fee at the time you execute each of these Franchise Agreements.

• If you enter into a Development Agreement, you must typically execute Sweetwaters’ current form of Franchise Agreement for the first Cafe it grants you the right to open within your Site Selection Area concurrently with the Development Agreement (unless you and Sweetwaters agree otherwise in writing).

• Your Development Fee will be deemed fully earned upon payment, and is not refundable under any circumstances. The Development Fee described above is calculated and applied uniformly to all of Sweetwaters’ franchisees.

• Sweetwaters is a member of the International Franchise Association (IFA) and participates in the IFA’s VetFran Program, which provides a discount on the Initial Franchise Fee to honorably discharged veterans of the U.S. Armed Forces who otherwise meet the requirements of the VetFran program in the following amounts: (i) $2,500 off the $49,500 Initial Franchise Fee due in connection with a single franchise purchase; or (ii) $10,000 off the Development Fee associated with the 3-Pack or 5-Pack offering.

5.  Royalty:  6% of weekly Net Sales

• Due Date:  Thursday following week ending the preceding Saturday.

• Completed accounting forms are due with Royalty payment; Sweetwaters will debit your bank account for amounts due.

6.  Brand Development Fund and Contributions:  2% of Net Sales (your “Fund Contribution”)

• Due Date:  Weekly; at the same time and in the same manner as your Royalty.

• The brand development fund is designed to promote the System, Proprietary Marks, and brand generally (a “Brand Development Fund” or “Fund”).

7.  Local Advertising Requirements:  1% of Net Sales

• Due Date:  As incurred.

• You must spend at least 1% of your Net Sales each month on the local advertising and promotion of your Franchised Business within your Designated Territory.

• All advertising materials must be approved by Sweetwaters prior to use/publication.

• Sweetwaters may require you to provide it with monthly reports detailing your local advertising expenditures.

8.  Additional Training Fee:  Sweetwaters’ then-current training tuition fee, which is currently $400/day for each trainer it provides (the “Additional Training Fee”)

• Due Date: As incurred.

• In addition to Sweetwaters’ then-current Additional Training Fee, you must reimburse it for any expenses it incurs in providing on-site or other special assistance to you or your personnel.

• This fee will not be charged in connection with minor, day-to-day assistance that Sweetwaters provides over the phone or via email, subject to Sweetwaters’ availability.

9.  Annual Convention:  then-current enrollment fee, which is currently $500

• Due Date:  If Sweetwaters establishes and holds an annual conference, you will be required to pay its then-current enrollment fee, which is currently $500.

• If you choose not to attend the annual conference, you will be required to pay a fee of $1,000.

10.  Transfer Fee:  $5,000

• Due Date:  Payable prior to obtaining Sweetwaters’ consent to your proposed transfer.

• There are other conditions that you and the proposed transferee must meet in order for Sweetwaters to approve any proposed transfer/assignment.

11.  Renewal Fees:  $2,500

• Due Date:  Prior to renewing a given Franchise Agreement.

• There are other conditions that you must meet in order for Sweetwaters to approve your renewal request.

12.  Technology Fee:  Sweetwaters’ then-current fee; currently, $149/month

• Due Date:  On or before the 5th of each month.

• Payable to Sweetwaters once you are open as consideration for (i) web hosting; (ii) website-related services; and (iii) any other technology that Sweetwaters (a) designated for use in connection with the System, and (b) determines to use the Technology Fees to cover some or all of the costs thereof.

13.  POS Fee/Credit Card Processing Fee:  then-current fee charged by Sweetwaters’ approved supplier, which is currently based on the credit card processing fees

• Due Date:  As incurred.

• Sweetwaters currently has an approved supplier from which you must purchase the POS System for use with your Franchised Business, as well as other related software.

• If you request additional support, you may be required to pay the approved supplier’s then-current support fee.

• Sweetwaters reserves the right to require you to modify or supplement its existing POS System as it deems appropriate, and you may be required to pay additional fees to the POS provider in the event such modification or supplemental features are implemented.

14.  Gift Card and Loyalty Program Fee:  $25 per month

• Due Date:  As incurred.

• This fee is imposed by Sweetwaters but paid to a third-party vendor. This third-party vendor reserves the right to modify the monthly fee upon reasonable notice to you.

15.  Employee Management Software Fee:  $60 per month

• Due Date:  As incurred.

• This fee is imposed by Sweetwaters but paid to a third-party vendor. This third-party vendor reserves the right to modify the monthly fee upon reasonable notice to you.

16.  Advertising Cooperative Fee:  up to 1% of Net Sales, unless the Cooperative votes for a larger amount to be expended as part of the Cooperative

• Due Date:  Upon demand.

• Payable to Sweetwaters if it assigns your Franchised Business to a Regional Advertising Cooperative. Any payment for a Regional Advertising Cooperative will be credited against your Local Advertising Requirement.

17.  Interest on Past Due Amounts:  1.5% per month or highest commercial contract interest rate applicable laws permit

• Due Date:  Immediately.

• Interest begins to accrue on the due date of any payment that has not been timely received or is not paid in full.

18.  Assessment for Understatement of Revenues:  amount, plus interest; plus cost of audit if understatement is more than 2% of Net Sales

• Due Date:  Upon receipt of invoice.

19.  Late Reporting Fees:  $10 per day, starting the 11th day after a report is due to Sweetwaters

• Due Date:  Upon demand.

• Payable in addition to other payments to Sweetwaters.

20.  Cost of Enforcement:  reasonable attorneys’ fees, plus costs

• Due Date:  Upon receipt of invoice.

• Due only if Sweetwaters is successful in enforcing the agreements and is awarded costs by the court.

21.  Indemnification:  will vary under circumstances

• Due Date:  As incurred.

• You must reimburse Sweetwaters if it is held liable for claims related to your Cafe’s operation or incurs costs in defending them.

22.  Insurance Premiums:  will vary under circumstances

• Due Date:  As incurred.

• If you do not pay your rent or insurance premiums, Sweetwaters can pay them for you and you must reimburse it.

23.  Testing:  costs of testing

• Due Date:  When billed.

• This covers the costs of testing new products or inspecting new suppliers you propose.

24.  Relocation Fee:  $2,000 if you decide to relocate your Franchised Business

• Due Date:  When you submit a letter requesting consideration of a new location.

• Payable to Sweetwaters to defray its costs associated with evaluating and approving/rejecting your relocation proposal.

25.  Management Fee:  $200 per day, plus Sweetwaters’ expenses

• Due Date:  As incurred.

• Due if Sweetwaters manages the Cafe for you if you cannot do so in compliance with the Franchise Agreement.

26.  Correction of Cafe Deficiencies:  will vary under circumstances

• Due Date:  As incurred.

• You must reimburse Sweetwaters if it pays to correct Cafe deficiencies because you do not do so.

27.  Dishonored Check Charge:  $50

• Due Date:  Upon demand.

• Payable if a check you provide to Sweetwaters is returned or dishonored by the bank, or if your EFT Account does not have sufficient funds to cover amounts you owe under the Franchise Agreement as they become due and owing to Sweetwaters.