If you are considering a Merle Norman Cosmetics franchise, don’t get blindsided by these 10 important franchise fees (from the initial franchise fee, to the royalty fee, to 8 other fees found in Items 5 and 6 of Merle Norman Cosmetics’ 2018 FDD).
1. Initial Package: $17,000 to $26,000
- There is no required initial franchise fee to become a Merle Norman Studio Owner, but you must purchase an initial package of Merle Norman Products, supplies, and other items when you sign your Studio Agreement.
- The initial package includes a full range of Merle Norman Products, business forms, supplies, and materials.
- If you are purchasing an existing Studio from another Studio Owner, you are not required to place an initial order.
- The quantity and variety of Merle Norman Products and other items included in the initial package will vary depending on the size and location of your Studio.
- The price you pay for an initial package ranges from approximately $17,000 to $26,000.
- For new Studio Owners, the price for the initial package is payable 55% at the end of the Initial Training, with the balance payable in 3 equal monthly installments beginning 2 months after shipment of your initial package.
- For branch Studio Owners, the price for the initial package is payable 30% before it is shipped to you, with the balance payable in 3 equal monthly installments beginning 2 months after the order is shipped.
- Provided all payments are made as scheduled, no interest is charged.
- The prices charged for these initial packages are uniform.
- If you wish to do so, you may purchase additional Merle Norman Products at the time you purchase the initial package at wholesale prices and on the same terms.
- For branch Studio Owners, under the Studio Branch Bonus Program as now in effect, because you already operate one or more Studios, you will receive a $2,500 credit on your Studio account for every branch Studio that you open, issued in two installments. You will receive an initial credit of $1,000 when the branch Studio opens, and you will receive the remaining $1,500 credit when the branch Studio is approved for the Gold Medallion Program.
- Your payment for an initial package is not refundable; however, any Merle Norman Product purchased as part of the initial package may be exchanged for other Merle Norman Products at any time within 90 days after you receive the initial package.
- There is no required initial fee or other required initial payment in connection with participation in the Gold Medallion Program.
2. Purchase of Additional Merle Norman Products: variable
- Due Date: Within 30 days after shipment.
- After your Studio opens, you may purchase additional Merle Norman Products at wholesale prices.
- You determine the amount of those additional purchases and the Merle Norman Products you will purchase.
3. Delinquency Fee: as required by Merle Norman Cosmetics’ then-current payment policies
- Due Date: If you fail to make timely payments of all amounts owed to Merle Norman Cosmetics.
- Merle Norman Cosmetics may require special arrangements for future amounts owed to it.
4. Advertising Co-op: variable
- Due Date: Within 30 days after billing to your Studio account.
- If an advertising co-op group exists or is formed in the A.C. Nielsen Designated Market Area in which your Studio is located, you must be a member of, and contribute to, that co-op.
5. Merle Norman POS Software Program: cost of program: $1,800; annual upgrades/support: $300
- Due Date: Cost of program: at the time of purchase; annual upgrades/support: within 30 days after billing to your Studio account.
- You are required to participate in ongoing upgrades and support for a period of one year. If you have financed any part of your purchase of the Merle Norman POS system through Merle Norman Cosmetics, you are required to participate in ongoing upgrades and support until you have repaid Merle Norman Cosmetics the amount financed.
6. Initial Training: Merle Norman Cosmetics currently does not charge a tuition fee for Initial Training, but it may do so in the future
- Due Date: Prior to the commencement of Initial Training.
- Although Merle Norman Cosmetics will provide some meals during training, you will be required to pay all costs of travel, living, and other expenses incurred by your manager and you while attending training.
7. Additional Training: Merle Norman Cosmetics currently does not charge a fee for additional training courses or attendance at regional or other meetings, but it may do so in the future
- Due Date: Within 30 days of receipt of notification from Merle Norman Cosmetics.
- You will be required to pay all costs of travel, living, and other expenses incurred by your manager and you while attending training.
8. Merle Norman POS Training: Merle Norman currently does not charge a tuition fee for Merle Norman POS training, but it may do so in the future
- Due Date: Prior to the commencement of Merle Norman POS training.
- Merle Norman POS Training is conducted exclusively via on-line training modules.
9. Non-Cash Payment System: all costs associated with non-cash payment systems
- Due Date: As incurred.
- You must accept debit cards, stored value gift cards, or other non-cash payment systems specified by Merle Norman Cosmetics to enable customers to purchase Merle Norman Products.
10. Indemnification: all liability, damages, costs, and expenses incurred by Merle Norman Cosmetics and its officers, directors, etc.
- Due Date: As incurred.
- You must defend, indemnify, and hold Merle Norman Cosmetics and its officers, directors, etc. harmless with respect to any and all claims arising directly or indirectly from, as a result of, or in connection with your operations at the Studio location.
- Your indemnification obligation does not include claims covered by Merle Norman Cosmetics’ product liability insurance.