Considering a Bach to Rock Franchise? Don’t Overlook These 21 Important Franchise Fees

Updated January 28, 2019.

If you are considering a Bach to Rock 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 Bach to Rock’s 2018 FDD).

1.  Initial Franchise Fee:  $35,000

• When you sign your Franchise Agreement, you will pay Bach to Rock an Initial Franchise Fee of $35,000. The Initial Franchise Fee must be paid in one lump-sum amount, will be fully earned when paid, and is non-refundable.

• Bach to Rock participates in the VetFran program sponsored by the International Franchise Association. The VetFran program is designed to assist honorably-discharged veterans of the U.S. Armed Forces who are interested in purchasing a franchise opportunity.

• Bach to Rock will waive 50% of the Initial Franchise Fee and 100% of the Royalty Fee for the first six months of operation for all qualifying veterans honorably discharged on or after January 1, 2000.

2.  Initial Harmony Gateway License Fee:  $5,000

• When you sign your Harmony Gateway License Agreement (which is the license agreement that grants a franchisee the right to use Bach to Rock’s proprietary software system), you will pay Bach to Rock an up-front fee of $5,000. The up-front fee must be paid in one lump-sum amount, will be fully earned when paid, and is non-refundable.

3.  Beat Refinery Optional Program:  none

• There is no additional Initial Franchise Fee or Initial Harmony Gateway License Fee if Bach to Rock approves your offering a Beat Refinery Optional Program.

4.  Development Fee:  the greater of 50% of the Initial Franchise Fee or $17,500 for each School that is scheduled to be established under the Area Development Agreement

• If you sign an Area Development Agreement, you must pay Bach to Rock a non-refundable Development Fee equal to the greater of 50% of the Initial Franchise Fee or $17,500 for each School that is scheduled to be established under the Area Development Agreement.

• Also, when you sign an Area Development Agreement, you must also sign a Franchise Agreement for the first School at that time.

• If you remain in full compliance with the Development Schedule, and you are not otherwise in default of any provisions of the Area Development Agreement, or any other Franchise Agreement, then for each Initial Franchise Fee you pay under a Franchise Agreement, Bach to Rock will credit back to you the amount of the Development Fee paid to it under the Area Development Agreement for each of these Bach to Rock Schools.

5.  Royalty Fee:  7% of Gross Sales

• Due Date:  Monthly, on the Gross Sales for the previous period.

• Gross Sales include the entire amount of your revenues (whether or not yet collected) arising out of owning or operating the Franchised Business.

6.  Advertising Obligations:  currently, 6% of Gross Sales, but Bach to Rock may increase this to up to 8% over time (currently, 2% of Gross Sales for National Brand Fund, 0% of Gross Sales for Regional Fund, and 4% of Gross Sales that you spend directly on local advertising)

• Due Date:  Same as Royalty, for contributions to the National Brand Fund.

• If Bach to Rock forms a Regional Fund in your area, you must join the Regional Fund.

7.  Additional Initial Training (for repeat or replacement trainees):  Bach to Rock’s then-current standard training fee for initial training (currently, $1,000 per person per day, subject to change)

• Due Date:  Before training.

• Bach to Rock may charge a reasonable fee for re-training persons who are repeating the initial training program or who are replacing a person who did not pass training or is no longer employed you.

8.  Additional Training and Refresher Courses:  Bach to Rock’s then-current standard training fee for these programs (currently, the fee is $500 per person per day, subject to change)

• Due Date:  Before training.

• Bach to Rock may provide refresher training programs, seminars, or advanced training at locations that it designates, including at annual conferences. Bach to Rock may require that you and your managers attend.

• You may request that Bach to Rock provide additional training at your School. Bach to Rock may charge you its then-standard training fee for any additional training programs, whether requested by you or required by Bach to Rock.

9.  Technology, Maintenance, and Help Desk Fee (Harmony Gateway):  currently, $210 per month

• Due Date:  Monthly, on the 10th of the month for the previous month.

10.  Architectural Review Fee:  up to $2,500

• Due Date:  Upon demand.

• Payable only if you use an architect not previously approved or designated by Bach to Rock, and Back to Rock has its architect review your plans.

11.  Special Assistance:  Bach to Rock’s then-current fee and its out-of-pocket expenses (the fee is currently $500 per representative per day, subject to change)

• Due Date:  Before Bach to Rock renders this assistance.

• If you request (and Bach to Rock can reasonably accommodate that request), Bach to Rock will furnish non-routine guidance and assistance to deal with your unusual or unique operating problems.

12.  Transfer Fee:  1/2 of the then-current franchise fee, prorated based on the remaining term, subject to a minimum fee of $15,000

• Due Date:  1/2 is paid when you submit the request to transfer; the balance is paid when the transfer closes.

• If you want to transfer your Franchise Agreement, you or the transferee must pay Bach to Rock this transfer fee. Paying this fee relieves the transferee from its obligation to pay a new initial franchise fee under the Franchise Agreement it must enter.

13.  Successor Franchise Agreement Fee:  20% of Bach to Rock’s then-current Initial Franchise Fee

• Due Date:  When you enter the Successor Franchise Agreement.

• You pay this amount instead of an entire Initial Franchise Fee when you sign the Successor Franchise Agreement.

14.  Copyright Royalty Fees:  $2,000 to $6,250 per year ($3,200 to $7,450 with Beat Refinery Optional Program)

15.  Audit Costs:  Bach to Rock’s costs and expenses connected with the inspection of your books (including reasonable accounting and attorneys’ fees)

• Due Date:  On demand.

• Only payable if Bach to Rock audits because you did not submit sales statements or keep books and records, or if you underreport your sales or underpay your royalties by 2%.

• You will also have to pay delinquency charges and interest on the underpayment.

16.  Delinquency Charges and Interest on Late Payments:  $100 for each failure to pay a fee on time, and interest at 1.5% per month on overdue amounts (but not more than the maximum legal rate of interest, if any)

• Due Date:  On demand.

• Only due if you don’t pay Bach to Rock the amounts you owe on time. Interest will be charged only on overdue amounts and will start to accrue on the date when the payment was originally due.

17.  Supplier Testing:  cost of inspection and evaluation (the amount will vary, but will include only the retail cost of the product/equipment tested, and Bach to Rock’s out-of-pocket travel costs)

• Due Date:  On demand.

• Only payable if you propose a new supplier of products. If Bach to Rock inspects the supplier or tests the supplier’s products, it may charge you for its costs in conducting those inspections or running those tests.

18.  Indemnification:  will vary under circumstances

• Due Date:  On demand.

• You must indemnify Bach to Rock and reimburse it for its costs (including any settlement, judgment, as well as its attorneys’ fees), if it is sued or held liable in any case having to do with your business operations, your operation of the School, or your breach of the Franchise Agreement.

19.  Liquidated Damages:  will vary under circumstances

• Due Date:  On demand.

• If the Franchise Agreement is terminated because of your default, you must pay Bach to Rock liquidated damages.

20.  Reporting Fee:  up to $1,000 per incident

• Due Date:  On demand.

• If you fail to submit financial and operational reports, records, or documents when required, Bach to Rock may charge you this fee.

21.  Enforcement Costs:  reasonable attorneys’ fees, court costs, and all expenses

• Due Date:  On demand.

• Only payable if you are in default under the Franchise Agreement, in which case you must reimburse Bach to Rock for the expenses it incurs (including reasonable attorneys’ fees) as a result of your default and also to enforce and/or terminate the Franchise Agreement.

• In addition, you must reimburse Bach to Rock for the expenses it incurs (including reasonable attorneys’ fees) if it obtains an injunction or other relief to enforce any provisions under the Franchise Agreement against you.