If you are considering a Buffalo Wings & Rings franchise, don’t get blindsided by these 18 important franchise fees (from the initial franchise fee, to the royalty fee, to 16 other fees found in Items 5 and 6 of Buffalo Wings & Rings’ 2017 FDD).

1.  Franchise Fee:  $20,000 to $40,000

• You must pay the following lump sum franchise fee when you sign the Franchise Agreement: (1) $40,000, if you are not then operating one or more Buffalo Wings & Rings Restaurants; (2) $30,000, if you are then operating one or more Buffalo Wings & Rings Restaurants; or (3) $20,000, if you are opening a Buffalo Wings & Rings Restaurant at a premises which was, at any time during the six-month period immediately prior to execution of the applicable Franchise Agreement, operated as a Buffalo Wings & Rings Restaurant.

2.  Area Development Fee:  minimum of $70,000 for at least three Franchised Restaurants that you must open during the term of the Area Development Agreement

• If you are selected as an Area Developer, you will sign an Area Development Agreement and pay a non-refundable Development Fee (the “Area Development Fee”) of a minimum of $70,000 for at least three Franchised Restaurants that you must open during the term of the Area Development Agreement.

• You will pay a $40,000 franchise fee for the first location and a $30,000 franchise fee for all subsequent locations set forth in the Area Development Agreement.

• From the $70,000 Area Development Fee for three locations, $40,000 will be applied to the franchise fee for the first location, $15,000 is applied to the franchise fee for the second location, and $15,000 is applied to the franchise fee for the third location (and you will pay the remainder of the franchise fee).

• The franchisor does not refund the Area Development Fee under any circumstances.

• For each location in excess of three Franchised Restaurants that you are granted, you will pay an additional Area Development Fee of $15,000 per location, all of which will be applied to the franchise fee for the additional Franchised Restaurants (and you will pay the remainder of the franchise fee for each additional Franchised Restaurant).

3.  Royalty:  up to 5% of Net Sales

• Due Date:  Payable by Friday of each week.

• Paid on Net Sales for preceding week ending on Sunday.

4.  Advertising Fee:  up to 4% of Net Sales for regional or network advertising

• Due Date:  Payable by Friday of each week.

• Paid on Net Sales for preceding week ending on Sunday.

5.  Local Advertising:  1% of Net Sales for local advertising

• Due Date:  Monthly.

• You must spend a minimum amount for advertising, promotion, and public relations directly related to your Franchised Restaurant.

6.  Cooperative Advertising:  cannot exceed 1% of Net Sales unless agreed by majority of coop members

• Due Date:  Monthly.

• If an advertising cooperative is established or operating in your area, you must contribute.

7.  Additional Training:  $1,000 to $4,000 for travel and lodging expenses, wages, and wage expenses, plus 125% of all other expenses incurred by Buffalo Wings & Rings in providing the training

• Due Date:  On demand.

• For your first Franchised Restaurant, Buffalo Wings & Rings provides training for your employees at the Franchised Restaurant for a minimum of five days after opening at no additional cost to you.

• Training will be conducted at a location designated by Buffalo Wings & Rings.

• You will be trained on those areas in which you or your staff does not qualify, as outlined in the manuals, or on new methods, recipes, or equipment.

• You will not be required to attend training more than once per year as long as qualified staff is in charge of operations of your Franchised Restaurant.

8.  POS Management Fee:  $225/month or the then-current POS Management Fee as listed in the Buffalo Wings & Rings manuals

• Due Date:  Payable by the 5th of each month when location opens for business.

• POS Management Fee covers POS maintenance/menu item programming, software upgrades, and POS-related help desk assistance.

9.  Audit:  $1,800 to $6,000 cost of audit, plus 18% per year interest on underpayment

• Due Date:  On demand.

• Payable if the audit is necessary because you fail to furnish required reports or if the audit shows the lower of an underpayment in excess of $200 or understatement of Net Sales by 2% or more.

10.  Renewal Fee:  $5,000

• Due Date:  Upon execution of renewal Franchise Agreement.

• Payable to Buffalo Wings & Rings at the time of renewal.

11.  Change-in-Control Fee:  $5,000

• Due Date:  Before consummation of Change-in-Control.

• Payable to Buffalo Wings & Rings when your owners transfer their interest in you such that 50% or more of your voting power immediately after the transaction is vested in persons who are different from those persons with whom 50% of voting power was vested immediately prior to the transaction.

12.  Reimbursement of Expenses:  125% of expenses incurred by Buffalo Wings & Rings

• Due Date:  On demand.

• Payable to Buffalo Wings & Rings if you fail to conform restaurant operations to Buffalo Wings & Rings standards after cure notice and Buffalo Wings & Rings elects to conform such operations at its own expense.

13.  Sales/Use Taxes:  variable

• Due Date:  Payable with your royalty or advertising fee payments.

• You must pay any state or local sales or use tax that may be assessed on the royalties, advertising fees, or other fees you pay to Buffalo Wings & Rings.

14.  Late Fee:  $100

• Due Date:  On demand.

• You must pay a $100 late fee on every payment due to Buffalo Wings & Rings that is more than 5 days late.

15.  Interest:  18% per year

• Due Date:  On demand.

• In addition to the late fee above, late royalty and advertising fee payments accrue interest at an annual rate of 18% per year beginning 30 days after their due date.

16.  Legal Expenses:  amount of expense advanced, plus 18% interest per year

• Due Date:  On demand.

• You must pay Buffalo Wings & Rings’ legal fees if it has to sue you to collect any payments due.

• Legal fees accrue interest at an annual rate of 18% per year beginning 30 days after their due date.

17.  Indemnification:  amount of costs and expenses incurred by Buffalo Wings & Rings, plus 18% interest per year

• Due Date:  On demand.

• You must reimburse Buffalo Wings & Rings for all expenses that it incurs because of your operation of the Franchised Restaurant.

18.  Liquidated Damages:  average monthly royalty during the 12 months preceding an abandonment or discontinuance of the franchise, multiplied by the lesser of 24 or the number of months remaining in the term of the franchise

• Due Date:  Upon abandonment or discontinuance of the franchise.

• Payable if you abandon or discontinue the franchise for any reason prior to expiration.