Considering The Barbershop A Hair Salon For Men Franchise? Don’t Overlook These 15 Important Franchise Fees

If you are considering The Barbershop A Hair Salon For Men franchise, don’t get blindsided by these 15 important franchise fees (from the initial franchise fee, to the royalty fee, to 13 other fees found in Items 5 and 6 of The Barbershop A Hair Salon For Men’s 2017 FDD).

1.  Initial Franchise Fee (per location):  $8,000 to $30,000

• Except as described in this Item, all new franchisees pay a $52,500 lump sum franchise fee when they sign a Multi-Unit Development Amendment (MUDA) ($30,000 for the first Franchise location, $12,500 for the second Franchise location, and $10,000 for the third Franchise location), and have the right to open 3 The Barbershop A Hair Salon For Men stores within a specified area and during a specified time period.

• In very rare circumstances, and if the franchisor agrees to award a single store Franchise Agreement or a 2-store MUDA, the franchisee will pay a $30,000 lump sum franchise fee when the franchisee signs a Franchise Agreement for a single store, or a $45,000 lump sum franchise fee when the franchisee signs a Franchise Agreement with a 2-store MUDA.

• The franchisor will only grant a 2-store MUDA if your store is in a city of less than 100,000 people and is at least 120 miles from any city that has more than 50,000 people.

• If the franchisor grants you a single store Franchise Agreement or a 2-store MUDA, you have no rights to buy additional franchises at a reduced price. There are no refunds under any circumstances.

• Under the MUDA, you must sign a separate Franchise Agreement before you open each store. There are no refunds if you do not open the additional stores on time, or under any other circumstances.

• If you agree to open more than 3 stores under a MUDA, the initial franchise fee for each store after the third store is $8,000 per store if these licenses are purchased at the time the MUDA is executed.

• If you purchase the right to open an additional The Barbershop A Hair Salon For Men store after you sign the MUDA, the initial franchise fee for each additional store is $12,500. The price of $12,500 for an additional store, after you sign a MUDA, is guaranteed for 3 years. After 3 years, the initial franchise fee for each store will be the then-current fee as stated in the then-current Offering Circular.

• The franchise fees will be uniform for each franchisee. The franchisor reserves the right to modify the franchise fee structure on a case-by-case basis in writing.

2.  Royalty:  4.5% of Gross Sales from the first day a store is open. In order to encourage ownership of multiple locations, the royalties decrease with ownership of a certain number of locations.

• Due Date:  Monthly, within 10 days after end of month.

3.  Website and SEO Fee:  $1,000 annually per location

• Due Date:  January 2nd.

• The main website transfers customers to sites for individual locations.

4.  Training Fee:  $250 per day including travel days, plus all expenses including airfare, lodging, and meals

• Due Date:  Training fee due upon invoice; expenses to be paid as incurred.

5.  System Modifications:  limited to (i) $1 in first year of term; and (ii) $20,000 during entire term

• Due Date:  As required.

• If the franchisor decides to modify the System by requiring new equipment, fixtures, software, trademarks, etc., you must make the modifications at your expense.

6.  Interest:  the lesser of 1.5% per month, or the maximum permitted by law

• Due Date:  Upon invoice.

• Interest may be charged on all overdue amounts.

7.  Fee for Failure to Maintain POS Computer System Communication:  $35 per week for each week, or portion of a week, that your POS Computer System is not maintained so that the franchisor can access your data

• Due Date:  Within 7 days of end of week that the franchisor cannot access your Computer System.

8.  Transfer Fee:  $3,000 for first store; $1,000 for each additional store in same transaction

• Due Date:  Prior to transfer.

• Transfer fees do not apply to assignments of interest to an entity controlled by you.

9.  Termination Fee:  $20,000, plus 50% of estimated royalties for remainder of term

• Due Date:  Upon termination.

10.  Audit:  cost of audit

• Due Date:  When billed.

• You must pay the cost of an audit, inspection, and professional fees if the franchisor finds a discrepancy of 5% or greater in any information you reported, or an underpayment of 1.5% or more of any fees due.

11.  Indemnification:  all costs, including attorneys’ fees

• Due Date:  Upon invoice.

• You defend suits at your cost and hold the franchisor harmless against suits involving damages resulting from your operation of the Franchised Business.

12.  Costs of Enforcement:  all costs, including attorneys’ fees

• Due Date:  Upon invoice.

• You will reimburse the franchisor for all costs in enforcing obligations if it prevails.

13.  Alternative Product Review Fee:  reasonable costs, not to exceed $1,000

• Due Date:  As incurred.

• Applies to new suppliers from which you wish to purchase, or products you wish to purchase, that the franchisor has not previously reviewed.

14.  Additional Operations Assistance:  $120 per hour

• Due Date:  As incurred.

• If additional requested assistance exceeds normal usage, you must pay for requested assistance.

15.  Additional Training:  market rates, plus your expenses as well as your employees’ expenses in attending, including salaries

• Due Date:  Time of service.

• You must pay for additional training if you request it.