Considering a Mainstream Boutique Franchise? Don’t Overlook These 16 Important Franchise Fees

If you are considering a Mainstream Boutique franchise, don’t get blindsided by these 16 important franchise fees (from the initial franchise fee, to the royalty fee, to 14 other fees found in Items 5 and 6 of Mainstream Boutique’s 2017 FDD).

1.  Initial Franchise Fee:  $12,000 to $35,000

• You will pay Mainstream an Initial Fee of $35,000 for your first Mainstream Boutique Business. The Initial Fee is due when you sign the Franchise Agreement.

• If you qualify to open additional Mainstream Boutique Businesses, you will pay Mainstream a reduced Initial Fee of $18,000 for each additional Mainstream Boutique Business due at the time you sign the Franchise Agreement for each Business.

• Existing franchisees that sign an additional Franchise Agreement by February 19, 2018 will pay a further reduced Initial Fee of $12,000.

• The Initial Fee is fully earned and non-refundable upon payment.

• Qualified prospective franchisees referred to Mainstream by existing franchisees may be eligible for a reduction to their Initial Fee under Mainstream’s referral program. Currently, prospective franchisees who qualify under this program will receive a $2,500 reduction applied to their Initial Fee. Mainstream reserves the right to either modify or cancel this referral program at any time.

2.  Continuing Fees:  7.5% of Net Revenues

• Due Date:  Thursday of each week for the preceding week.

• You must meet certain minimum Continuing Fees for each 6-month reporting period during the term of the Franchise Agreement.

3.  Advertising Fund Contribution:  0.5% of Net Revenues

• Due Date:  Currently, by the 10th of each month for the preceding month.

4.  Local Advertising:  currently, 1% of Net Revenues per year

• Due Date:  Mainstream has the right to collect any amount not spent on local advertising as it determines upon reviewing your annual local advertising report.

5.  Reimbursement of Audit Costs:  dependent upon the costs incurred by Mainstream in conducting an audit

• Due Date:  Within 10 days of receipt of an invoice indicating the amount owed.

• You must reimburse Mainstream for audit costs if an audit shows that you understated your Net Revenues by more than 2% or underpaid Continuing Fees by more than $500 in any 12-month period.

6.  Transfer Fee:  costs incurred by Mainstream or $7,500, whichever is less

• Due Date:  Prior to transfer.

7.  Renewal Fee:  $5,000

• Due Date:  Prior to renewal.

8.  Training Fees:  currently, Mainstream does not charge for training, but may in the future

• Due Date:  Prior to training.

9.  Annual Convention Expenses:  $500 to $2,000

• Due Date:  As incurred

• Mainstream currently charges a $179 per person registration fee for the convention, and you are responsible for covering all expenses including airfare, hotel, meals, and compensation for you or your staff attending the convention.

10.  Technology Fees:  $0 to $350 per month

• Due Date:  Monthly basis.

• Fee is payable to Mainstream.

11.  Additional Training:  currently, Mainstream does not charge for additional training programs, but may charge an amount not to exceed $300 per course per person

• Due Date:  Prior to training.

• Mainstream may offer optional training courses.

12.  Additional Supplier Approval:  cost to Mainstream to evaluate, review, or test samples of unapproved products, proposed supplier

• Due Date:  Upon invoice demand.

• If you desire to purchase goods or services from other unapproved suppliers, you must pay the cost to Mainstream to evaluate and test the proposed samples and supplier.

13.  Service Charge:  $50 if you fail to pay any Continuing Fees or to submit a report of Net Revenues or other reports of financial statements to Mainstream within 10 days after due date

• Due Date:  On demand.

14.  Interest Charges for Unpaid Amounts:  18% per annum simple interest or the maximum legal rate allowable in the state in which your Business is located, whichever is less

• Due Date:  On demand.

• Applies to past due payments of Continuing Fees, Advertising Fees, or other payments due to Mainstream.

15.  Extension Fee:  $2,500 for up to 6 months

• Due Date:  Upon request for extension.

• If Mainstream grants you a one-time extension to open of up to 6 months, you must pay an extension fee.

16.  Annual Modernization Costs:  $500 to $1,500

• Due Date:  As incurred.

• Mainstream reserves the right to require you to make minor updates, such as painting or cosmetic changes, on an annual basis.