If you are considering The Brass Tap franchise, don’t get blindsided by these 24 important franchise fees (from the initial franchise fee, to the royalty fee, to 22 other fees found in Items 5 and 6 of The Brass Tap’s 2017 FDD).
1. Franchise Fee: $37,500
- If you enter into a single Franchise Agreement with The Brass Tap, you must pay a nonrefundable initial franchise fee (the “Franchise Fee”) of $37,500 for each Brass Tap Bar you will develop.
- Unless you enter into an Area Development Agreement with The Brass Tap, the Franchise Fee is payable as follows: (i) $18,750 upon the signing of the Franchise Agreement, and (ii) $18,750 upon the sooner of the signing of the lease for your Brass Tap Bar or 30 days prior to ground breaking for your Brass Tap Bar.
- If you enter into an Area Development Agreement with The Brass Tap, you will be entitled to pay a reduced Franchise Fee for each Brass Tap Bar you agree to develop. The precise reduction in the Franchise Fee will depend upon the number of Brass Tap Bars you agree to develop, and will be determined in accordance with the following schedule: (i) $37,500 for the first Brass Tap Bar; (ii) $25,000 for the second Brass Tap Bar; (iii) $15,000 for the third Brass Tap Bar; (iv) $5,000 for the fourth Brass Tap Bar; and (v) $0 for the fifth and subsequent Brass Tap Bars.
- If you qualify as a Veteran Participant, The Brass Tap will offer you a 10% discount on the Franchise Fee.
2. Area Development Fee: $31,250 to $41,250 (representing half of the reduced Franchise Fees afforded to area developers)
- If you are qualified to serve as an area developer, and enter into an Area Development Agreement with The Brass Tap, you must pay an initial development fee (the “Development Fee”) upon signing the Area Development Agreement and agree to abide by a specified Development Schedule. The Development Fee is not refundable under any circumstance.
- The Development Fee you must pay will range from $31,250 to $41,250 (representing half of the reduced Franchise Fees afforded to area developers), depending upon the number of Brass Tap Bars to be opened.
- After paying the Development Fee, upon entering into each respective Franchise Agreement for the Brass Tap Bars you agree to develop, you must pay the remaining half of the applicable reduced Franchise Fee.
3. Royalty: 4% of previous month’s Adjusted Gross Sales
- Due Date: Payable each month on the day The Brass Tap designates (“Payment Day”).
- ACH required.
4. Local Advertising: you are required to spend $5,000 on local advertising during the first 5 months of your Brass Tap Bar’s operation. Thereafter, you must spend at least 1.5% of your monthly Adjusted Gross Sales.
- Due Date: As required.
- You will spend this money directly with your local advertising vendors.
- All advertising must be approved by The Brass Tap before you use it.
5. Marketing and Development Fund Contribution: you are currently required to contribute 1.5% of your previous month’s Adjusted Gross Sales to the Marketing and Development Fund; however, The Brass Tap may in the future increase this required contribution to 2.5%, as it determines in its sole discretion
- Due Date: Payable each month on the Payment Day.
- The Marketing and Development Fund may periodically furnish you with samples of advertising, marketing, and promotional formats and materials at no cost.
- Multiple copies of these materials will be furnished to you at The Brass Tap’s direct cost of producing them, plus any related shipping, handling, and storage charges.
6. Cooperative Advertising: as determined by the cooperative, but not more than 2% of your previous month’s Adjusted Gross Sales
- Due Date: As determined by cooperative.
- If an advertising cooperative is formed for your area, you must join the cooperative.
- Any money you contribute to the cooperative will count toward your local advertising requirement.
7. TIPS Certification Training for Intervention Procedures (responsible alcohol service training): $150 per person, or the then-current fee
- Due Date: As needed.
- Each of your managers, bartenders, and other employees The Brass Tap designates must be TIPS certified as required by state or local laws or regulations.
- The Brass Tap collects this fee on behalf of, and remit such fee to, your local supplier.
8. Website Fee: $100
- Due Date: Monthly.
- This fee is payable to The Brass Tap for maintenance of the web page it will create for you on its website and support of its website.
9. Initial Operator Training: no cost for up to 3 operators. You must pay all expenses incurred by the trainees in connection with the Initial Training (i.e., travel, lodging, meals, applicable trainee wages). The amounts are unknown and may vary depending upon factors such as the third-party supplier selected and your distance from training. Additional and subsequent trainee charge: then-current training fee (currently $1,000 per trainee).
- Due Date: Before training.
- Your two Designated Operators must complete the 4-week Initial Training prior to opening.
- Upon your request, one additional manager or key employee may attend the Initial Training at no additional cost.
- If you request that The Brass Tap provide the Initial Training to any new or additional Designated Operator or other employees, you must pay its then-current additional or subsequent training fee.
10. Opening On-Site Assistance: you must pay all wages for you and your employees and be responsible for the cost of all food and beverage products used. The Brass Tap will pay the costs and expenses for its personnel.
- Due Date: As incurred.
- The Brass Tap will provide certain on-site opening assistance for your Brass Tap Bar during the Training Week and Opening Week at no additional fee.
11. Mandatory Additional On-Site Assistance: you must pay The Brass Tap any costs incurred, including additional training fees, travel, lodging, and wage expenses
- Due Date: As incurred.
- If The Brass Tap determines that the sales volume and demands of your Brass Tap Bar during Opening Week exceed the capabilities of your Designated Operators and employees, The Brass Tap or its designee will provide additional, mandatory, on-site assistance for an additional period of time (as The Brass Tap determines necessary, in its sole discretion).
12. Optional Additional On-Site Training: The Brass Tap’s then-current daily wage per trainer, plus expenses (including travel, lodging, and meals)
- Due Date: As incurred.
- At your request, The Brass Tap will make additional or refresher training in the form and content available at your Brass Tap Bar or at other locations The Brass Tap designates.
13. Operating Manager Training For Second and Successor Store Openings: you must pay for all expenses, including all travel, lodging, and wage expenses, incurred by your Operating Manager
- Due Date: Before opening.
- The Operating Manager of any second or successor store must either (i) complete the 4-week Initial Operator Training, or (ii) complete 3 weeks of such Initial Training at your existing location and then complete 1 week of Initial Training conducted by The Brass Tap or one of its designated representatives at a location The Brass Tap designates.
14. Interest: 18% or the highest contract rate of interest permitted by law, whichever is less
- Due Date: When The Brass Tap requests.
- All applicable interest begins from the due date of delinquent payments.
15. Late Fee: 10% penalty, plus interest
- Due Date: Late charges due immediately upon nonpayment or underpayment.
- Any applicable interest begins from the due date of delinquent payments.
16. Inspection/Audit: deficiency and late charges, plus audit costs under certain circumstances
- Due Date: Deficiency and late charges plus audit costs due immediately.
- Inspection and audit costs payable if deficiency exceeds 3% of fees payable.
17. Assignment/Transfer: the lesser of $20,000 or 50% of the then-current Franchise Fee (the “Transfer Fee”)
- Due Date: Before transfer.
- Assignment or transfer requires The Brass Tap’s advance written approval.
18. Software License Fees: $10 per month
- Due Date: As required.
- Currently, you must purchase, install, and maintain an RTIconnect Back Office System for each Family Sports Pub you operate.
- The Brass Tap collects the monthly Software License Fees on behalf of RTIconnect.
19. Prohibited Product or Service Fine: $250 per day of use of unauthorized products or services
- Due Date: If incurred.
- In addition to other remedies available to The Brass Tap.
20. Costs and Attorneys’ Fees: will vary under circumstances
- Due Date: On demand.
- If you default under your Agreement with The Brass Tap, you must reimburse it for the expenses it incurs (such as attorneys’ fees) in enforcing or terminating the Agreement.
21. Interim Operating Expenses: $4 per week plus reasonable expenses, including travel, lodging, and meals
- Due Date: To be determined.
- Management expenses and costs apply when The Brass Tap operates your Brass Tap Bar on an interim basis.
22. Renewal: $18,750
- Due Date: Upon signing first successor agreement. If you are in compliance with the Franchise Agreement, The Brass Tap may grant you up to 2 successor franchises each with 5-year terms.
- You will not be required to pay an additional renewal fee upon your signing of the second successor agreement.
23. Area Development Agreements Extension Fee: balance of the Franchise Fees for the number of undeveloped Brass Tap Bars
- Due Date: When The Brass Tap grants the extension.
- If you do not meet your Minimum Development Quota obligations under an Area Development Agreement as of the end of any development period set forth on the Development Schedule, The Brass Tap may (but is not obligated to) grant you an extension under the Development Schedule in exchange for the nonrefundable extension fee.
24. Inspection and Testing: $250
- Due Date: With request for approval of product or supplier.
- Payable if you request that The Brass Tap evaluate a product or supplier that it has not previously approved.