If you are considering a Maui Wowi franchise, don’t get blindsided by these 32 important franchise fees (from the initial franchise fee, to the royalty fee, to 30 other fees found in Items 5 and 6 of Maui Wowi’s 2017 FDD).
1. Initial Franchise Fee: $30,000 to $65,000
- The initial franchise fee (“Initial Franchise Fee”) is $30,000 for a Single Unit Franchise, $42,500 for a Standard Franchise, and $65,000 for an Empire Builder Franchise.
- If you purchase an Empire Builder Franchise and open and commence operations of all 10 Operating Units within 3 years of the effective date of your Franchise Agreement, you will have the option to enter into 1 Standard Franchise for no Initial Franchise Fee.
- If you are currently an active or active reserve member of the U.S. Armed Forces, have been honorably discharged from the U.S. Armed Forces (“Eligible Military”), or if the franchisee is a federally recognized 501(c)(3) organization (“501(c)(3)”), you will receive a 20% discount on the Initial Franchise Fee.
2. Fixed Launch Fee: $0 to $12,000
- If you operate a Fixed Operating Unit, you will pay Maui Wowi a non-refundable Fixed Launch Fee of $12,000, which offsets its costs in supporting your efforts to find and develop a Permanent Site, including its assistance in locating, leasing, and constructing a Permanent Site for a Fixed Operating Unit and providing on-site training.
- The Fixed Launch Fee is reduced to $6,000 for the second Fixed Operating Unit and $0 for your third or more Fixed Operating Units.
3. Mobile Launch Fee: $2,200
- Franchisees operating a Mobile Operating Unit will pay Maui Wowi a non-refundable Mobile Launch Fee of $2,200, which offsets its costs in supporting your efforts to operate your first temporary event, including its assistance in operating the Mobile Operating Unit and providing on-site training.
4. Mobile Operating Unit: $26,000 to $53,000
- If you elect to operate at temporary events or at special or temporary venues, you will purchase from Maui Wowi or its affiliate a Mobile Operating Unit at a cost ranging from $26,000 to $53,000.
5. Equipment: up to $25,000
- You may also purchase certain equipment from or through Maui Wowi’s affiliate, although some of the required or optional equipment is also available through third-party suppliers. This equipment is expected to cost up to $25,000, depending on which type of Operating Unit you choose to open.
6. Advertising Fee: 15% of the purchase price of Maui Wowi Products and Maui Wowi Supplies and Equipment
- Due Date: Payable at the time of each purchase of the Maui Wowi Products and Maui Wowi Supplies and Equipment.
- The Advertising Fee of 15% of the purchase price of Maui Wowi Products and Maui Wowi Supplies and Equipment is calculated at the time of the purchase and is in addition to the list price for Maui Wowi Products and Maui Wowi Supplies and Equipment.
- This fee represents approximately 1% to 2% of the recommended sales price of a typical smoothie.
7. Snack Program Fee: $150 per month
- Due Date: Monthly, or at greater intervals in Maui Wowi’s sole discretion.
- Collected during first seven days of each month via ACH, for the ability to sell non-proprietary products purchased from third parties and non-Maui Wowi branded items purchased from Maui Wowi’s affiliate.
8. Technology Fee: $99.95 per month
- Due Date: Monthly.
- Collected during first seven days of each month via ACH, for access to Maui Wowi’s proprietary intranet system online network for communications and online ordering of equipment and product.
9. Additional Persons Training Fee: $1,000 per person ($500 per person for the In-Store portion of the Training Program, and $500 per person for the New Owner Training portion of the Training Program)
- Due Date: Two weeks prior to beginning of training.
- The training of two individuals is included in the Initial Franchise Fee. The Additional Persons Training Fee is for any additional persons who attend the Training Program.
10. Additional Training Fee: $300 per person per day
- Due Date: At time of training.
- Maui Wowi reserves the right to conduct one Franchise Owner International Convention each year, which you are required to attend.
- You are also responsible for any travel and living expenses in attending a Franchise Owner International Convention.
11. Annual Meeting Registration Fee: $1,500 for one or two to attend a Franchise Owner International Convention, and if you attend, $500 is credited back to you; $500 for each additional attendee you bring in excess of two (not including travel and living expenses)
- Due Date: As incurred.
- Maui Wowi will debit your Depository Account for this fee, which is non-refundable. This fee is charged to all franchisees whether or not they attend the Meeting.
12. Training Cancellation Fee: $500
- Due Date: At time of cancellation.
- If you cancel your Training Program attendance within two weeks of the date of the program, you will be required to pay this cancellation fee to Maui Wowi.
13. Depository Account: $3,000 (must be replenished on a regular basis)
- Due Date: At signing of Franchise Agreement.
14. Data Fees: up to $75 per month (subject to reasonable annual and/or service enhancement increases)
- Due Date: Same as Royalty.
- Fee for collecting data from your POS System.
15. POS System Software, Maintenance, Support, and Upgrade Contract: $129 per month
- Due Date: Upon opening of Permanent Site and monthly thereafter.
- If you operate at a Permanent Site, you are required to obtain a POS System that Maui Wowi designates from the supplier that it designates.
- You will be required to purchase a software maintenance, support, and upgrade contract from the supplier and pay this monthly fee, which is subject to increase by the supplier.
16. Renewal Franchise Fee: 50% of the then-current Initial Franchise Fee
- Due Date: When new Franchise Agreement is signed at renewal.
- Applicable if you renew your Franchise Agreement.
17. Transfer Franchise Fee: 25% of the then-current and applicable Initial Franchise Fee
- Due Date: When transfer documents are signed.
- Payable if you are purchasing your Franchised Business as a result of a full transfer from another franchisee. A full transfer includes, but is not limited to, a transfer of 50% or more ownership or control.
18. Relocation Fee: $500
- Due Date: At signing of relocation operating unit rider.
- Payable if Maui Wowi approves the relocation of your Fixed Operating Unit.
19. Transfer Training Fee: $2,500 for two individuals ($500 for each additional individual)
- Due Date: When transfer documents are signed.
- Payable if you are purchasing your Franchised Business as a result of a full transfer from another franchisee.
20. Document Administration Fee: $500
- Due Date: Lump sum.
- Applicable for an Affiliate Transfer, including, but not limited to, a transfer of less than 50% of ownership or control.
21. Default Rate: (a) the Prime Rate plus 4%; or (b) 18% per annum calculated monthly on any outstanding balance (“Default Rate”), or the highest permissible rate
- Due Date: Payable upon assessment.
- Payable on all overdue amounts.
22. Late Report Fee: $100 per report
- Due Date: Payable upon assessment.
- Payable if any required financial statement or report is delinquent.
23. Collection Costs: all collection costs, including reasonable attorneys’ fees
- Due Date: Payable upon assessment.
- Payable only if Maui Wowi is required to retain an attorney or collection agency to collect delinquent payments from you.
- Maui Wowi will also collect as damages any attorneys’ fees and costs incurred by it in defending claims that arise due to your actions as a Maui Wowi franchisee.
24. Non-Sufficient Funds Fee: $50 for each ACH withdrawal returned for non-sufficient funds; $50 for each credit card declined for non-sufficient funds
- Due Date: Payable upon assessment.
- Payable only if your electronic funds transfer from your depository account or any check you remit to Maui Wowi is returned for non-sufficient funds.
25. Audit: cost of audit, plus interest at Default Rate on underpayments, or the maximum rate permissible by law
- Due Date: Payable upon assessment.
- Payable only if audit is caused by your failure to furnish reports or if audit reveals an understatement of fees or assessment of 5% or more.
26. New Supplier Approval Fee: a charge not to exceed the reasonable cost of the inspection and the actual cost of the test, not to exceed $5,000
- Due Date: Payable upon assessment.
- Payable by either you or the proposed supplier if you request Maui Wowi’s approval of a new or alternative supplier.
27. Non-Participation Fee: $100 per day
- Due Date: Payable upon assessment.
- For failure to participate in local, regional, seasonal, promotional, and other programs, initiatives, and campaigns.
28. Early Termination Fee: the average monthly Advertising Fees, Snack Program Fees, and Technology Fees paid for any consecutive 12-month period within the preceding 48-month period multiplied by the number of months remaining in the term of the Franchise Agreement, and the product is divided by 2
- Due Date: 30 days prior to the early closing of the Restaurant.
- You must provide Maui Wowi with 90 days prior written notice of the termination of your Franchise Agreement.
29. Management Fee: 6% of the Franchised Business’s Gross Sales (in addition to the Royalty Fee and Advertising Fee), plus Maui Wowi’s direct out-of-pocket costs and expenses
- Due Date: Payable with Royalty and Advertising Fee.
- If Maui Wowi assumes the management of your Franchised Business for any period of time.
30. Equipment Transfer Fee: $500
- Due Date: Prior to consummation of transfer.
- Payable by transferee for each piece of equipment you sell to cover Maui Wowi’s costs and expenses to document the transfer.
31. E-mail Account Fee: $150
- Due Date: Payable upon assessment.
- For each time you need to change your assigned “@mauiwow.org” email address.
32. Resale Assistance Fee: $12,000
- Due Date: Payable upon assessment.
- If Maui Wowi identifies a buyer for your Franchised Business in the case of a Full Transfer.
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