Considering an Abrakadoodle Franchise? Don’t Overlook These 25 Important Franchise Fees

Updated September 27, 2020.

If you are considering an Abrakadoodle franchise, don’t get blindsided by these 25 important franchise fees (from the initial franchise fee, to the royalty fee, to 23 other fees found in Items 5 and 6 of Abrakadoodle’s 2020 FDD).

1.  Initial Franchise Fee:  $25,400 to $38,900

• Abrakadoodle offers 2 types of territories, a local territory and a regional territory.

• You must pay Abrakadoodle, on signing the Franchise Agreement, a $25,400 initial franchise fee for a standard local territory (up to 20,000 qualifying households) or $38,900 for a standard regional territory (50,000 to 60,000 qualified households).

• A “qualifying household” is defined in the Franchise Agreement as a household that has an annual income of $75,000 or more.

• Abrakadoodle may charge an additional initial franchise fee for a territory that is larger than a standard local territory. The additional initial franchise fee for a territory that is larger than a standard local territory is calculated at a rate of $0.45 per qualifying household above 20,000 qualifying households (but below Abrakadoodle’s standard minimum regional territory of 50,000 qualifying households), rounded down to the nearest dollar.

• Abrakadoodle may charge an additional initial franchise fee for a territory that is larger than a standard regional territory. The additional initial franchise fee for a territory that is larger than a standard regional territory is calculated at a rate of $0.45 per qualifying household above 80,000 qualifying households, rounded down to the nearest dollar.

• Abrakadoodle may reduce the initial franchise fee by $1,000 (for a local territory) or by $3,000 (for a regional territory) if you are converting a similar business to an Abrakadoodle business or you have been employed for at least 1 year by an Abrakadoodle business.

• Abrakadoodle offers a 10% reduction in the franchise fee to qualified veterans.

2.  Prepaid Continuing Franchise Fees, Class Management Program Fees, and Technology Fees:  $3,738

• On signing the Franchise Agreement, you must also pay Abrakadoodle $3,738 as prepaid minimum continuing franchise fees ($500 per month), class management program fees (currently $95 per month), and technology fees (currently $28 per month) for your 1st 6 months of operation (deemed to begin 30 days after you complete initial training).

• After your 1st 6 months of operation, you will pay continuing franchise fees, class management program fees, and technology fees monthly.

3.  Initial Materials Fee:  $5,000

• On signing the Franchise Agreement, you must also pay Abrakadoodle a $5,000 materials fee. The materials fee is uniform and non-refundable once Abrakadoodle ships the materials to you.

4.  Advertising Fee:  $600

• On signing the Franchise Agreement, you must also pay Abrakadoodle a 1-time $600 advertising fee. The fee is uniform and non-refundable.

5.  Quick Start and Business Development Training:  $3,500 for each additional trainee after the first 2

• At no extra charge to you, Abrakadoodle will provide Quick Start Training, Business Development Training, and training materials for up to 2 trainees.

• If you choose to send additional people to Business Development Training, you must pay Abrakadoodle a $3,500 training fee for each additional person. Training fees are uniform and non-refundable.

• You must pay for all your trainees’ travel, meals, and lodging.

6.  Continuing Franchise Fee:  8% of Gross Sales

• Due Date:  Payable monthly by 10th day of each month.

• The continuing franchise fee is subject to a $500 monthly minimum.

• You must prepay the 1st 6 months’ minimum fees.

• You must sign the Authorization for Automatic Payments when you sign the agreement. After the
  1st 6 months, Abrakadoodle will draft these fees each month.

7.  Advertising and Promotional Contribution:  1% of Gross Sales

• Due Date:  Same as continuing franchise fee.

• Abrakadoodle may draft these contributions each month.

• Abrakadoodle administers a system-wide advertising and promotional fund.

8.  Remedial or Follow-up Training:  currently, $3,500 per person per day

• Due Date:  Before day 1 of training.

• You or your manager(s) must attend this training if Abrakadoodle decides it is necessary.

9.  Business Development Training of Replacement Manager:  currently, $3,500

• Due Date:  Before day 1 of training.

• No fee if training is required less frequently than every 2 years.

10.  Technology Fee:  currently $28 per month

• Due Date:  Same as continuing franchise fee.

• Abrakadoodle collects this fee on behalf of the network hosting company for its service and ongoing support of the Abrakadoodle Intranet.

• You must prepay the 1st 6 months’ fees; thereafter, Abrakadoodle may draft these fees each month.

11.  Class Management Program Fee:  currently, $95 per month

• Due Date:  Same as continuing franchise fee.

• Abrakadoodle collects this fee on behalf of the supplier (JackRabbit) of the required web-based or other class management program.

• You must prepay the 1st 6 months’ fees; thereafter, Abrakadoodle may draft these fees each month.

12.  Field Assistance:  currently, $500 per day, plus expenses

• Due Date:  Before 15th day of scheduled assistance.

• This fee is for field assistance you need or request.

13.  Annual Conference:  proportionate share of Abrakadoodle’s out-of-pocket costs

• Due Date:  Before first day of the conference.

• You must also pay for travel, meals, and lodging.

14.  Advanced Abrakadoodle Training:  varies under circumstances

• Due Date:  Before training.

• Available to existing franchisees who wish to offer additional programs.

15.  Equipment, Supply, or Supplier Testing or Inspection:  out-of-pocket expenses, plus the then-current per diem charges for Abrakadoodle’s personnel

• Due Date:  30 days after billing.

• This fee covers the cost of testing or inspecting, granting or approving new equipment, supplies, or suppliers you propose.

16.  Transfer:  an amount equal to 8% of the total sales price, including all equipment, goodwill, materials, and all other elements of the sale. This fee is subject to a minimum transfer fee that is equal to 30% of then-current initial franchise fee for comparable territory, plus Abrakadoodle’s initial materials fee, and its out-of-pocket travel, lodging, and meal expenses.

• Due Date:  Before transfer.

• Payable when Franchise Agreement or controlling interest in franchise is transferred; no charge if Franchise Agreement is transferred to a legal entity you control.

17.  Transfer Involving a Broker:  actual broker’s fee

• Due Date:  Before transfer.

• If a broker is involved in referring a buyer, you must pay the broker’s fee.

18.  Renewal:  5% of then-current initial franchise fee for a comparable territory

• Due Date:  On signing of renewal Franchise Agreement.

19.  Audit:  cost of inspection or audit

• Due Date:  30 days after billing.

• Payable only if Abrakadoodle finds, after an audit, that you have understated any amount owed to it by 3% or more for any 3-month period, or if the examination or audit is made necessary by your failure to furnish required information or documents to Abrakadoodle in a timely manner.

20.  Late Fees and Interest:  $25, plus lesser of 1.5% per month or highest rate of interest allowed by law (In California, the highest lawful rate of interest is 10% per annum.)

• Due Date:  When billed.

• Payable on all overdue amounts.

• Abrakadoodle may change the late fee up to 1 time each year by giving you 30 days’ prior written notice.

21.  Reimbursements and Penalty Fees:  will vary under circumstances

• Due Date:  When billed.

• Reimbursements and penalty fees on returned checks, declined charges, and similar financial defaults.

• Penalty fees on unpaid invoices; the use, offer for sale, or sale of unapproved products or services; and the non-use by you, your teachers, your managers, or your students, of required branded apparel in class.

22.  Inspection:  Abrakadoodle’s actual costs, including travel expenses, room, board, and compensation of its representative or designee

• Due Date:  When billed.

• Payable if Abrakadoodle must make more than 2 inspections due to your repeated or continuing failure to comply with the Franchise Agreement.

23.  Deficiencies:  Abrakadoodle’s actual costs

• Due Date:  When billed.

• If you do not satisfy your obligations under the Franchise Agreement, Abrakadoodle may perform your obligations for you. You must reimburse Abrakadoodle for its costs in performing your obligations.

24.  Costs and Attorneys’ Fees:  will vary under circumstances

• Due Date:  As incurred.

• Payable if your non-compliance with the Franchise Agreement causes Abrakadoodle to incur legal expenses.

25.  Indemnification:  will vary under circumstances

• Due Date:  As incurred.

• You must reimburse Abrakadoodle if it is held liable for claims involving the operation of your Franchised Business.