Considering a Tutor Doctor Franchise? Don’t Overlook These 18 Important Franchise Fees

Updated November 11, 2019.

If you are considering a Tutor Doctor 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 Tutor Doctor’s 2019 FDD).

1.  Initial Franchise Fee:  $44,700 to $49,700

• The initial franchise fee for a franchise is $44,700 for a Local Territory Franchise or $49,700 for a Regional Territory Franchise.

• You must pay Tutor Doctor an initial deposit equal to 25% of the initial franchise fee when you sign the Franchise Application Agreement. The balance of the initial franchise fee is payable in a lump sum when you sign the Franchise Agreement, and it is deemed fully earned upon its receipt.

• The deposit is refundable only at the end of the Evaluation Period if Tutor Doctor determines that you are not qualified or suitable to become a franchisee.

2.  Initial Fees for Empire Builder Program:  $94,400

• Under the Empire Builder Program, you will purchase one Regional Territory Franchise for $49,700, one Local Territory Franchise for $44,700, and another Local Territory Franchise will be granted to you for no additional fee. The total initial fees payable to Tutor Doctor under the Empire Builder Program are $94,400.

• You must pay Tutor Doctor an initial deposit equal to 25% of the total initial fees when you sign the Franchise Application Agreement. The balance of the initial fee is payable in a lump sum when you sign the Franchise Agreement, and it is deemed fully earned upon its receipt.

• The deposit is refundable only at the end of the Evaluation Period if Tutor Doctor determines that you are not qualified or suitable to become a franchisee. Once the Franchise Agreement is signed, the initial fee is not refundable.

• There are no other payments to or purchases from Tutor Doctor or its affiliates that you must make before you begin operating your Franchised Business.

3.  Transfer:  $10,000 charged to selling franchisee at the time of transfer, plus any applicable broker or commission fees

• Due Date:  On closing of transfer.

• The transfer fee is calculated based on the type of franchise you initially purchased. There is no transfer fee when an individual transfers to his/her business entity, one time only.

4.  Initial Training:  no fee paid to Tutor Doctor for up to three individuals attending Tutor Doctor’s training program; $2,500 per person for additional trainees; costs and expenses of attending training

• Due Date:  As incurred.

• Tutor Doctor does not charge a training fee for three individuals to attend its initial training program. If you send more than three individuals to Tutor Doctor’s initial training, you must pay Tutor Doctor a training fee for each additional individual.

• You will bear the cost of any wages, benefits, travel, lodging, and meal expenses incurred by you and your attendees during initial training.

5.  Additional Training:  then-current tuition rate, plus expenses

• Due Date:  At time of training.

• If you request that Tutor Doctor provide additional training on-site, you will pay its then-current tuition rate, plus its representative’s expenses, including travel, lodging, and meals.

• If you request additional training at Tutor Doctor’s training site, you will incur these expenses for your attendee, as well as the tuition fee.

6.  Royalty Fee:  the greater of 8% of Gross Sales, or the minimum Royalty Fee due

• Due Date:  By the 15th of every month for the preceding calendar month.

• Royalty Fees are paid via electronic funds transfer, or another method Tutor Doctor designates.

• If you do not report your Gross Sales, Tutor Doctor will charge (or deduct from your bank account) the Minimum Royalty Fee.

• When Tutor Doctor has determined your accurate Gross Sales, if you owe it additional Royalty Fees, it will charge (or deduct from your bank account) any balance due on a day it specifies.

7.  Branding Fund Contribution:  2% of Gross Sales

• Due Date:  Payable at the same time and in the same manner as the Royalty Fees.

8.  Cooperative Marketing:  your pro rata share of any marketing conducted

• Due Date:  On demand.

• Payable if Tutor Doctor conducts a marketing initiative that is approved by it and 75% of its franchisees.

9.  Renewal:  $5,000

• Due Date:  At time of renewal.

10.  Interest:  1.5% per month or the highest applicable rate, whichever is less

• Due Date:  On demand.

• Payable on any amounts owed to Tutor Doctor or its affiliates that is overdue.

11.  Audit Fees:  cost of audit, plus interest on underpayment

• Due Date:  On demand.

• If an audit is required due to your failure to provide reports, or if an audit reveals an understatement of any amount by 2% or more, you must pay any understated amount to Tutor Doctor plus interest, and you must reimburse the costs of the audit.

• Tutor Doctor retains its other rights under the Franchise Agreement and applicable law, including the right to terminate your Franchise Agreement.

12.  Tutor Doctor Care Center Fee:  Tutor Doctor’s then-current fee, which is 4% of monthly Gross Sales. (This amount may change in the future.) However, if you produce an average annual enrollment value per unique client of $2,500, then you will receive a 1% rebate at the end of the calendar year

• Due Date:  By the first day of every month for the preceding calendar month.

• You must participate in Tutor Doctor’s care center for lead conversions. The amounts you contribute to the care center are in addition to your Marketing and Advertising Spend and other fees as described in the Franchise Agreement.

• Tutor Doctor expects the care center fee to change in the future to a different amount, which will not exceed $1.50 per minute and $35 for each booked consultation.

13.  Indemnification:  will vary under circumstances

• Due Date:  When incurred.

• You must defend, indemnify, and hold Tutor Doctor and its affiliates and various other parties harmless from all losses, damages, liability, costs, and expenses etc. of any kind arising in whole or in part from the operation of your Business or any violation of your Franchise Agreement with Tutor Doctor.

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

• Due Date:  As incurred.

• You must reimburse Tutor Doctor for its costs in enforcing the terms of your Franchise Agreement with it.

15.  Bank or Credit Card Authorization Denial:  $50

• Due Date:  If incurred.

• You must execute a pre-authorized debit form permitting Tutor Doctor to receive payment of all continuing fees by electronic funds transfers to be deducted from your bank account.

• You must also provide Tutor Doctor with valid and active credit card information to permit it to charge this credit card for the amount of any fees due to it, if it chooses to use this method.

• If the bank or credit card issuer denies the charge, you must pay this fee in addition to other amounts due to Tutor Doctor. If you have three denials, Tutor Doctor has the right to terminate your Franchise Agreement.

16.  Technology Fee:  $150 per month

• Due Date:  Payable at the same time and in the same manner as the Royalty Fees.

• This fee is payable for the costs of certain technology used in the System, including the customer relationship management software.

17.  Website Management Fee:  $150 per month

• Due Date:  Payable to Tutor Doctor or its designee at the same time and in the same manner as the Royalty Fees.

• This fee is payable for the development and management of the website(s) maintained for the benefit of the System (in addition to other funds that may be used to support those websites, including various of the Branding Fund and other marketing related funds).

18.  Education Payment Plan:  a $60 monthly fee (subject to annual revision, but not to exceed $120 per month)

• Due Date:  Due on the due date for payment of monthly Royalty Fees.

• The monthly fee is to cover your mandatory registration fees per person for the ongoing training and conference events that you must attend (which may include regional meetings, Tutor Doctor hosted webinars, Tutor Doctor e-learning courses, and third-party courses and certifications).

• These amounts are due even if you do not attend.

• This fee is in addition to the costs of meals, entertainment, lodging, travel, and wages to attend training events, all of which are at your sole expense.

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