Considering The Woodhouse Day Spa Franchise? Don’t Overlook These 26 Important Franchise Fees

Updated March 10, 2019.

If you are considering The Woodhouse Day Spa franchise, don’t get blindsided by these 26 important franchise fees (from the initial franchise fee, to the royalty fee, to 24 other fees found in Items 5 and 6 of The Woodhouse Day Spa’s 2018 FDD).

1.  Initial Franchise Fee:  $48,000

• You must pay a $48,000 initial franchise fee when you sign the Franchise Agreement.

• If you are signing the Franchise Agreement under a Development Agreement, Woodhouse Day Spa will credit the pro rata portion of the development fee allocable to each Spa against the initial franchise fee due for that Spa.

• Woodhouse Day Spa may negotiate the amount of the initial franchise fee in its sole discretion. In determining whether an adjustment is warranted, it considers factors like the size and experience of the franchisee, whether it has previously dealt with the franchisee, the impact of market forces in a given location, and other relevant circumstances.

2.  Development Fee:  $48,000 for the first Spa to be developed, plus 50% of the initial franchise fee for each additional Spa to be developed

• If you sign a Development Agreement, you must pay a development fee when you sign the Development Agreement equal to $48,000 for the first Spa to be developed plus 50% of the initial franchise fee for each additional Spa to be developed.

• As described above, the pro rata portion of the development fee allocable to each Spa will be credited against the initial franchise fee due for that Spa.

• The development fee is calculated the same for all franchisees entering into Development Agreements under the offering, but the actual dollar amount paid will vary depending on the number of Spas you must develop.

• The development fee and initial franchise fee are not refundable.

3.  Spa Kit:  $26,000 when you sign the Franchise Agreement and $10,000 when you secure the location for the Spa

• You must purchase a “Spa Kit” from Woodhouse Day Spa, which includes certain furnishings, merchandising items, decor items, private label inventory, and printed pieces.

• You must pay to Woodhouse Day Spa the Spa Kit deposit of $26,000 when you sign the Franchise Agreement and $10,000 when you secure the location for the Spa.

• Amounts paid for the Spa Kit are fully earned when paid and are not refundable.

4.  Website Development and Set-up Fee:  $1,200

• When you secure the location for your Spa, either through lease or purchase, you must pay Woodhouse Day Spa a one-time $1,200 Website development and set-up fee to build a Webpage for your Spa that will, among other things, promote your Spa and permit customers to purchase gift cards online.

• This Website development and set-up fee is not refundable.

5.  Online Reservation System Set-up Fee:  $2,500

• When you secure the location for your Spa, you must pay Woodhouse Day Spa a one-time $2,500 online reservation system set-up fee. The online reservation system set-up fee is not refundable.

6.  Construction Management Services Fee:  $14,000

• You must use Woodhouse Day Spa’s in-house construction management team to provide construction management services in connection with the development of your Spa. The construction management services fee is a one-time payment of $14,000 and must be paid just after you secure the location for your Spa, either through lease or purchase, but before you begin planning for construction.

• This fee is not refundable.

7.  Royalty Fee:  6% of Gross Sales

• Due Date:  On or before each Tuesday for the preceding week.

• Woodhouse Day Spa requires you to pay the royalty fee by electronic funds transfer.

8.  Advertising Assessment (including Advertising Fund contribution and local advertising requirement):  2% of Gross Sales

• Due Date:  The Fund contribution is due on or before each Tuesday for the preceding week. Payments for local advertising are due when billed by the local advertiser.

• Currently, 0.25% of the Advertising Assessment is allocated to the Fund and 1.75% to local advertising. Woodhouse Day Spa may require you to allocate differing amounts to local advertising (individually or through a cooperative) or to the Fund.

• Woodhouse Day Spa requires you to pay the Advertising Assessment by electronic funds transfer.

9.  Technology Fee:  currently, $475 per month

• Due Date:  When billed.

• This fee covers, among other things, Website maintenance, ongoing access to the online reservation system, and email hosting and maintenance.

• A portion of the technology fee is passed-through to vendors.

• Woodhouse Day Spa may increase this fee as its costs to provide these services increase.

10.  Additional Opening Assistance:  varies

• Due Date:  When billed.

• Woodhouse Day Spa provides two on-site visits in connection with the opening of your Spa.

• Woodhouse Day Spa may charge you a fee and require you to reimburse it for its costs of providing additional opening assistance.

11.  Merchandise for Resale:  Woodhouse Day Spa’s cost, plus shipping and handling charges

• Due Date:  On demand.

• Woodhouse Day Spa may provide to you at cost certain collateral merchandise for resale that identifies the system (for example, caps and t-shirts).

12.  Marketing and Communications Software:  currently, $300 per month

• Due Date:  When billed.

• You must pay the software supplier Woodhouse Day Spa requires (currently, Demand Force) a monthly software fee in the amount they require.

• The amount you are required to pay is determined by the software provider.

13.  Software License Fee: currently, $99 to $400 per month

• Due Date:  When billed.

• You must pay Woodhouse Day Spa its costs or its designated supplier the amount they charge for these services.

14.  Interest:  8% per year or the maximum lawful rate

• Due Date:  On demand.

• Woodhouse Day Spa may charge interest on all overdue amounts.

15.  Additional Training:  at Woodhouse Day Spa’s option, a reasonable fee based on its costs of providing the training

• Due Date:  Before additional training.

• You must also pay the expenses of your personnel attending training.

16.  On-site Remedial Training:  the then-current per diem fee for remedial training, plus costs. Woodhouse Day Spa’s current per diem rate is $250.

• Due Date:  When billed.

• If you ask or Woodhouse Day Spa believes it is appropriate, it will (subject to availability) provide trained representatives to conduct on-site remedial training at your Spa.

17.  Fee for Non-Attendance of Annual Convention:  up to $300 per day per person

• Due Date:  When billed.

• If you fail to attend Woodhouse Day Spa’s annual franchisee convention, Woodhouse Day Spa may charge you up to $300 per day for each person that was required to attend the meeting and failed to do so.

18.  Transfer Fee:  $5,000, plus Woodhouse Day Spa’s reasonable costs and expenses associated with the transfer, including training costs, legal and accounting fees

• Due Date:  With transfer application.

• There is no fee if an individual or partnership transfers rights to a corporation controlled by the same interest holders or for a transfer of a non-controlling interest in you by a Principal not signing the Guaranty.

19.  Securities Offering Fee:  $3,000, plus Woodhouse Day Spa’s reasonable costs and expenses associated with the proposed offering

• Due Date:  When billed.

• Woodhouse Day Spa limits its review to the manner in which the offering materials treat your and Woodhouse Day Spa’s relationship.

20.  Renewal Fee:  50% of Woodhouse Day Spa’s then-current initial franchise fee

• Due Date:  Signing of renewal Franchise Agreement.

• You must give Woodhouse Day Spa at least 6 months’ and not more than 9 months’ notice to renew and meet other renewal conditions.

21.  Inspection and Testing:  cost of inspection, if applicable, and cost of test

• Due Date:  When billed.

• Before approving a supplier, Woodhouse Day Spa may require you to pay the cost of testing the supplier’s products and inspecting its facilities.

22.  Gift Card Fee:  varies

• Due Date:  On demand.

• On termination or expiration of the Franchise Agreement, you must pay Woodhouse Day Spa an amount equal to 50% of the total outstanding balance of all coupons, gift cards, gift certificates, and vouchers issued by the Spa as of the date of termination or expiration.

23.  Indemnification:  varies according to loss

• Due Date:  On demand.

• You must indemnify Woodhouse Day Spa when certain of your actions result in loss to it.

24.  Audit Fee:  cost of audit

• Due Date:  When billed.

• Payable if an audit shows you have understated any amount owed to Woodhouse Day Spa by 3% or more.

25.  Insurance Fee:  a reasonable amount based on Woodhouse Day Spa’s expenses

• Due Date:  On demand.

• If you fail to maintain the required insurance, Woodhouse Day Spa may (but need not) obtain it for you. If it does, it will charge you a fee, plus its expenses.

26.  Enforcement Costs:  will vary

• Due Date:  As incurred.

• You must pay Woodhouse Day Spa’s costs of enforcement (including attorney’s fees and costs) if you do not comply with the Franchise Agreement.