Considering a Dogtopia Franchise? Don’t Overlook These 23 Important Franchise Fees

Updated March 12, 2019.

If you are considering a Dogtopia franchise, don’t get blindsided by these 23 important franchise fees (from the initial franchise fee, to the royalty fee, to 21 other fees found in Items 5 and 6 of Dogtopia’s 2018 FDD).

1.  Initial Franchise Fee:  $40,095 to $49,500

• You will pay Dogtopia an initial franchise fee of $49,500 in a lump sum when you sign the Franchise Agreement.

• If you sign multiple Franchise Agreements at the same time, Dogtopia will reduce the initial franchise fee for your second and any subsequent franchise, by 10% (currently, reduced to $44,550).

• The initial franchise fee is not refundable under any circumstances. Except as described below, the initial franchise fee is uniform for all franchisees.

• If you are a current franchisee in good standing under all of your current Franchise Agreements, Dogtopia may reduce the then-current initial franchise fee for your second or any subsequent franchise, by 10% (currently, reduced to $44,550).

• Dogtopia is a member of the International Franchise Association (“IFA”) and participates in the IFA’s VetFran Program, under which Dogtopia offers special financial incentives to qualified veterans of the U.S. Armed Forces.

• If you are a qualified veteran, and if you qualify for a Dogtopia franchise, Dogtopia will reduce the initial franchise fee for your first franchise, by 10% (currently, reduced to $44,550) or the then-current initial franchise fee for your second or any subsequent franchise, by an additional 10% (currently, reduced to $40,095).

2.  Real Estate Acquisition and Construction Package:  $44,500

• At the time you sign the Franchise Agreement, you must also pay Dogtopia for the Real Estate Acquisition & Construction Package (“REACP”). Through Dogtopia’s vendors, you will be provided with assistance with site identification, lease negotiation, design, and construction.

• This amount is not refundable under any circumstances. The REACP fee is uniform for all franchisees.

3.  Microsite and Social Media Account Fees: monthly fee of $200 and a one-time start-up fee of $500

• Dogtopia will setup your microsite and social media account in exchange for a start-up fee of $500. This fee is paid at the time your location microsite launches.

• In addition to the start-up fee, you must pay Dogtopia a $200 monthly fee after your launch for ongoing services relating to your microsite and social media account.

• The $500 start-up fee is not refundable under any circumstances and is uniform for all franchisees.

4.  Development Fee:  full amount of Dogtopia’s then-current initial franchise fee for your first Franchised Business and an initial franchise fee discounted by 10% for each additional Franchised Business you commit to open under the Area Development Agreement

• If you sign an Area Development Agreement, you will pay Dogtopia the full amount of its then-current initial franchise fee for your first Franchised Business and an initial franchise fee discounted by 10% for each additional Franchised Business you commit to open under the Area Development Agreement.

• The fees collected pursuant to the Area Development Agreement are nonrefundable once paid unless an undeveloped Franchised Business is sold under which up to 50% may be refunded.

5.  Royalty Fee:  7% of Gross Sales

• Due Date:  By Tuesday of each week, following the week during which the revenues were generated.

• Dogtopia requires this fee to be paid by an electronic transfer.

6.  Marketing Fund Fee:  up to 3% of Gross Sales; currently, 2% of Gross Sales

• Due Date:  By Tuesday of each week, following the week during which the revenues were generated.

• Dogtopia requires this fee to be paid by an electronic transfer.

7.  Digital Marketing Service Package Fee:  $200

• Due Date:  Monthly.

• Dogtopia requires this fee to be paid by an electronic transfer.

8.  Point-of-Sales System Fee:  $125

• Due Date:  Monthly.

• This amount may be paid to Dogtopia or the vendor, depending on Dogtopia’s contract with the vendor.

9.  Initial Training Fee:  $2,000 per person

• Due Date:  As invoiced.

• Dogtopia will provide initial training for up to 3 people at no additional charge. If you send more people to initial training (including people sent to initial training after you open), you must pay Dogtopia this fee.

10.  Additional Training and Assistance:  $400 per person per day, plus Dogtopia’s expenses

• Due Date:  As incurred.

11.  Annual Conference Fees: $349 for first attendee; $289 for each additional attendee

• Due Date:  One month prior to Annual Conference.

12.  Custom Graphic Design Fee:  then-current hourly fee (currently, $40 per hour), plus actual costs

• Due Date:  Time of assistance.

• Payable only if you request Dogtopia to do custom graphic design work on any advertising or other promotional materials that it develops.

13.  Customer Service:  all costs incurred in assisting your customers

• Due Date:  On demand.

• You must reimburse Dogtopia if it determines that it is necessary for it to provide service directly to your customer.

14.  Transfer Fee:  $7,500

• Due Date:  At the time of transfer.

• If you sell your Business, then a transfer fee is paid to Dogtopia.

• This fee may be negotiated between the transferor and transferee as part of their sale. The fee must be paid to Dogtopia by one or both of the parties.

• Does not apply to an assignment to your controlled entity.

15.  Renewal Fee:  $7,500

• Due Date:  Upon execution of a successor Franchise Agreement.

16.  Late Fees:  18% per year or the highest rate allowed by law, whichever is less

• Due Date:  On demand.

• Applies to all overdue fees, contributions, and other amounts due to Dogtopia, including any understatement in amounts due revealed by an audit.

17.  Non-Sufficient Funds Fee:  $100

• Due Date:  On demand.

• Paid if Dogtopia debits your account and its debit is declined or dishonored by your financial institution.

18.  Insurance Policies:  amount of unpaid premiums, plus Dogtopia’s reasonable expenses in obtaining the policies

• Due Date:  On demand.

• Payable only if you fail to maintain required insurance coverage and Dogtopia elects to obtain coverage for you.

19.  Audit Expenses:  all costs and expenses associated with audit

• Due Date:  On demand.

• Payable only if Dogtopia’s audit shows an understatement in amounts due of at least 3%.

20.  Cost of Enforcement:  all costs, including attorneys’ fees

• Due Date:  On demand.

• You must reimburse Dogtopia for all costs in enforcing obligations if it prevails.

21.  Indemnification:  all costs, including attorneys’ fees

• Due Date:  On demand.

• You must defend and hold Dogtopia harmless at your cost against claims arising from your operation of the Franchised Business.

22.  Liquidated Damages:  all costs incurred by Dogtopia due to franchisee’s default and/or termination

• Due Date:  On demand.

• Liquidated damages may be equal to the greater of: (i) $10,000; (ii) an amount equal to the last 6 months’ Royalty Fees and Marketing Fund Fees due and payable; or (iii) an amount equal to ½ of the last 12 months’ Royalty Fees and Marketing Fund Fees due and payable, multiplied by the number of years (prorated for partial years) left in the then-current term of the Agreement.

23.  Management Fee:  3% of Gross Sales

• Due Date:  By Tuesday of each week, following the week during which the revenues were generated.

• This fee will only be collected under the following limited circumstances: paid when Dogtopia must appoint a person to manage your store because of death, disability, expiration, termination, or your default under the provisions of the Franchise Agreement.