Updated March 25, 2020.
If you are considering a Saladworks franchise, don’t get blindsided by these 30 important franchise fees (from the initial franchise fee, to the royalty fee, to 28 other fees found in Items 5 and 6 of Saladworks’ 2019 FDD).
1. Initial Franchise Fee: $30,000 to $35,000
- Saladworks offers approved prospects the right to open a Saladworks restaurant at a single location.
- If Saladworks grant you the right to open a restaurant, you must sign a franchise agreement and pay the $35,000 initial franchise fee to Saladworks when you sign the franchise agreement. The initial franchise fee is nonrefundable when paid.
- If you are an existing Saladworks franchisee, your initial franchise fee is $30,000.
- Saladworks currently offers a 50% discount off the initial franchise fee to active members and veterans of the U.S. Armed Forces who were honorably discharged.
2. Development Fee: $30,000 for your first restaurant, plus $15,000 for each additional restaurant to be opened under the mandatory development schedule in the multi-unit development agreement
- Saladworks offers approved prospects the right to open a minimum of 3 Saladworks restaurants under the terms of a multi-unit development agreement with a discounted initial franchise fee of $30,000 for each restaurant.
- Upon execution of the multi-unit development agreement, you must pay Saladworks a development fee in the following amount: $30,000 for your first restaurant, plus $15,000 for each additional restaurant to be opened under the mandatory development schedule in the multi-unit development agreement.
- This payment is fully earned by Saladworks and due in lump sum when you sign the multi-unit development agreement. The development fee is not refundable.
- Upon execution of the multi-unit development agreement, you also will sign a franchise agreement for your first restaurant. You will receive a $30,000 credit from the development fee as full payment of the initial franchise fee due under your first franchise agreement.
- Within 90 days of opening of each Saladworks restaurant, you are required to sign a franchise agreement for the next Saladworks restaurant you agreed to develop in accordance with your mandatory development schedule.
- Saladworks will grant you a credit of $15,000 from the development fee against the initial franchise fee payable for each additional franchise agreement you sign. The $15,000 balance of the initial franchise fee for each additional franchise agreement is due when you sign the franchise agreement.
3. Architectural Plan Review Fee: $1,000
- Saladworks will provide you with its Prototype Design Package (“PDP”) at no charge.
- If you do not use Saladworks’ preferred architect, the PDP is to be used by your local architect, identified and engaged by you, to prepare site-specific scaled architectural, mechanical, electrical, and plumbing drawings for the permitting and buildout of your restaurant (“architectural plans”).
- Saladworks or a third-party vendor that Saladworks selects will review the architectural plans prepared by your local architect, including any revisions to the architectural plans, to ensure adherence to Saladworks’ standards based on the PDP.
- The fee for the architectural plan review is $1,000 and is payable when you request the PDP. The architectural plan review fee is waived if you use Saladworks’ preferred architect.
4. Royalty Fee: 6% of Net Sales
- Due Date: Wednesday of each week.
5. Brand Development Fund Advertising Fee: 3% of Net Sales
- Due Date: Wednesday of each week.
6. Technology Bundle Fee: $475 to $910
- Due Date: Monthly.
7. Unauthorized Advertising Fee: $1,000 per occurrence
- Due Date: When billed.
8. Sublease Fee or Guaranty Fee: 0.5% of Net Sales
- Due Date: As incurred.
9. Maintenance/Repair/Refurbishing: actual amount incurred
- Due Date: As incurred.
10. Grand Re-Opening Marketing Fee: $2,500
11. Transfer Fee: (i) 50% of Saladworks’ then-current initial franchise fee if transferring to an existing franchisee; or (ii) 75% of Saladworks’ then-current initial franchise fee if transferring to a new owner. The fee to transfer ownership among existing partners only is $2,000.
- Due Date: Before the transfer.
12. Commission: 5% to 10% of gross purchase price
- Due Date: At closing.
13. Interest: lesser of 18% per year, or highest rate allowed by law, plus $100 (In California, the highest lawful rate of interest is 10% per annum.)
- Due Date: As incurred.
14. Insufficient Funds Fee: lesser of 18% per year, or highest rate allowed by law, plus $100
- Due Date: As incurred.
15. Cost and Attorneys’ Fees: actual amount incurred
- Due Date: As incurred.
16. Audit Expenses: actual amount incurred; cost ranges from $250 to $7,500
- Due Date: As incurred.
17. Insurance: cost of insurance. If you fail to maintain your insurance as required, there is an 18% administrative cost charge if Saladworks exercises its right to procure your insurance.
- Due Date: As required by insurer or broker.
18. Renewal Fee: $17,500
- Due Date: On renewal.
19. Service Fee: $600 per day
- Due Date: As incurred.
20. Supplier Evaluation Fee: a minimum of $500
- Due Date: As incurred.
21. Annual Convention: your travel and lodging expenses
- Due Date: As incurred.
22. Failure to Attend Annual Convention: $1,000
- Due Date: As incurred.
23. Training Cancellation Fee: currently $400 per person
- Due Date: As incurred.
24. Food Safety and Operations Excellence Report Fee: actual amount incurred
- Due Date: As incurred.
25. Additional Requested Store Opening Assistance and Additional Requested On-Site Assistance: currently, $500 per person per day, plus expenses
- Due Date: As requested.
26. Additional Training: travel and lodging expenses
- Due Date: As incurred.
27. Training for Replacement Personnel: travel and lodging expenses
- Due Date: As incurred.
28. Survey Fee: actual amount incurred
- Due Date: As designated.
29. Use of Proprietary Marks: actual amount incurred
- Due Date: As designated.
30. Indemnification: actual amount incurred
- Due Date: As incurred.
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