If you are considering a Beef Jerky Outlet franchise, don’t get blindsided by these 28 important franchise fees (from the initial franchise fee, to the royalty fee, to 26 other fees found in Items 5 and 6 of Beef Jerky Outlet’s 2018 FDD).
1. Initial Franchise Fee: $22,450 to $44,900
- You must pay Beef Jerky Outlet an initial franchise fee of $44,900, payable in a lump sum when you sign the Franchise Agreement, for the right to establish a single Store.
- If you are a qualified United States veteran, Beef Jerky Outlet will reduce the initial franchise fee (for your first Store only) by 50%.
- The initial franchise fee is therefore not imposed uniformly on all franchisees. The initial franchise fee is not refundable under any circumstances.
2. Pre-Opening Purchases/Charges: $5,000 to $10,000
- You must purchase from Beef Jerky Outlet’s affiliate, PLE, a portion of your initial inventory of specialty food products, including jerky products, sausages, smoked meats, and other specialty food items.
- Beef Jerky Outlet estimates that the cost of these items will be between $5,000 to $10,000. There are no refunds.
3. Technology System Set-Up Fee: $950
- You must also pay Beef Jerky Outlet a Technology System Set-Up Fee of $950 at the time of signing the Franchise Agreement. It is not refundable under any circumstances.
4. Grand Opening Fee: $5,000
- At the time of signing the Franchise Agreement, you must also pay to Beef Jerky Outlet the sum of $5,000 for your Grand Opening.
- Beef Jerky Outlet will hold these funds for you and remit payment to marketing vendors when they are due. If you do not open the franchise, Beef Jerky Outlet will refund any unused portion of the Grand Opening fee to you.
5. Development Fee: 100% of the initial franchise fee for the first Store to be developed ($44,900), plus a deposit equal to 50% of the reduced initial franchise fee ($14,950) for each additional Store to be developed
- If you sign a Multi-Unit Operator Agreement with Beef Jerky Outlet, the initial franchise fees you pay under the individual Franchise Agreements will be $44,900 for the first Store and $29,900 for each additional Store you develop.
- When you sign the Multi-Unit Operator Agreement, you must pay Beef Jerky Outlet a development fee equal to 100% of the initial franchise fee for the first Store to be developed ($44,900) and sign a Franchise Agreement for this first Store, plus a deposit equal to 50% of the reduced initial franchise fee ($14,950) for each additional Store to be developed under the Multi-Unit Operator Agreement.
- For your first Store, Beef Jerky Outlet will apply a portion of the development fee to pay the initial franchise fee in full. For each Store developed after the first one, Beef Jerky Outlet will apply a pro rata portion of the development fee towards the initial franchise fee due under the then-current Franchise Agreement and the balance of the initial franchise fee due, or $14,950, is payable when you sign the Franchise Agreement for the Store.
- Beef Jerky Outlet reserves the right to adjust this formula depending upon the size of the area and the financial ability of the Multi-Unit Operator. The development fee must be paid in a lump sum and is non-refundable.
- Under a Multi-Unit Operator Agreement, Beef Jerky Outlet expects that you will develop a minimum of two Stores.
6. Royalty: 6% of Gross Sales
- Due Date: Payable on Tuesday of each week for the week ending Sunday (or the next business day if any Tuesday is not a business day).
- Royalty Fees are calculated based on Gross Sales for the previous week ending Sunday.
- Amounts due will be withdrawn by EFT from your designated bank account.
7. National Marketing Fee: 2% of Gross Sales
- Due Date: Payable at the same time and in the same manner as the Royalty Fee.
- Beef Jerky Outlet may increase the National Marketing Fee, up to a maximum of 4% of Gross Sales, with 30 days prior notice to you.
8. Local Marketing: 2% of Gross Sales
- Due Date: Must be spent monthly.
- Payable to your local marketing suppliers.
- Any marketing materials you wish to use must first be approved by Beef Jerky Outlet.
9. Training Program (New or Additional Trainees): Beef Jerky Outlet’s then-current fee per person, plus expenses. Current training fee = $500 per day.
- Due Date: Before training.
- Beef Jerky Outlet will train you and/or your Designated Manager at no additional charge.
- If you request that Beef Jerky Outlet provide its initial training program to any additional employees, or to new or replacement employees during the term of your Franchise Agreement, you must pay its training fee as well as the trainees’ expenses, including travel, lodging, meals, and wages.
10. On-Site Training or Assistance: Beef Jerky Outlet’s then-current per diem fee per trainer, plus expenses. Current per diem fee = $500 to $1,500.
- Due Date: When incurred.
- If you request that Beef Jerky Outlet provide additional training at your Store, or if it determines that you need additional training, you must pay Beef Jerky Outlet’s daily fee for each trainer it sends to your Store, and you must reimburse each trainer’s expenses, including travel, lodging, and meals.
11. Transfer Fee: Franchise Agreement: $10,000; Multi-Unit Operator Agreement: $20,000
- Due Date: Closing date of transfer.
- No fee charged for: (i) a one-time transfer from individual(s) to a corporate entity formed for convenience of ownership of the franchise, (ii) transfer to a family member Beef Jerky Outlet approves, (iii) transfer to family member due to death or disability.
12. Renewal: $2,500
- Due Date: When you sign the renewal Franchise Agreement.
13. Relocation Assistance: reimbursement of Beef Jerky Outlet’s costs (estimated to be $750 to $1,500)
- Due Date: On demand, if incurred.
- If you request Beef Jerky Outlet’s assistance to relocate your Store.
14. Indemnification: will vary under circumstances
- Due Date: On demand.
- You must reimburse Beef Jerky Outlet for the costs it incurs if it is sued or held liable for claims that arise from your operation of the business or for costs associated with defending claims that you used the Marks in an unauthorized manner.
15. Costs and Attorneys’ Fees: will vary under the circumstances
- Due Date: On demand.
- If you default under your Agreement, you must reimburse Beef Jerky Outlet for the expenses it incurs (such as attorneys’ fees) in enforcing or terminating your agreement.
16. Customer Service: reimbursement of Beef Jerky Outlet’s costs in assisting your customers (estimated to be $3,500 to $7,000)
- Due Date: On demand.
- If Beef Jerky Outlet determines it is necessary for it to provide service directly to your customers.
- Costs you must reimburse include a per diem fee of $600/day, plus travel and living expenses for Beef Jerky Outlet’s representative.
17. Interest on Overdue Amounts: the lower of 1.5% per month or the highest rate Beef Jerky Outlet can charge by law
- Due Date: If incurred.
- Interest is payable on any amounts owed to Beef Jerky Outlet or its affiliates that are not paid when due.
- Interest accrues from the original due date until payment is made in full.
18. Audit: cost of audit (estimated to be between $1,500 and $5,000)
- Due Date: On demand.
- Beef Jerky Outlet has the right to audit your books at any time.
- If an audit shows that you have understated Gross Sales or any amount owed to Beef Jerky Outlet by 3% or more, or that you have not conducted the minimum local marketing requirement, you must reimburse the costs of the audit, including fees and expenses. You must also pay any understated amount plus interest.
19. POS System Maintenance and Support: $80 to $175
- Due Date: Monthly.
- Payable to supplier.
20. NSF (Non-Sufficient Funds) Charges: $35
- Due Date: If incurred.
- Payable to Beef Jerky Outlet.
21. Technology and Systems Set-Up Fee: $950
- Due Date: Upon signing Franchise Agreement.
- Payable to Beef Jerky Outlet.
22. Technology Subscription and Support Fee: $100 to $200
- Due Date: Monthly.
- Payable to Beef Jerky Outlet.
23. Repair, Maintenance, and Remodeling/Redecorating: will vary under the circumstances
- Due Date: As incurred.
- Payable to approved suppliers.
- You must regularly clean and maintain your Store and its equipment.
- Beef Jerky Outlet may require you to remodel or redecorate your Store to meet its then-current image for all Beef Jerky Outlet Stores.
- Beef Jerky Outlet will not require you to remodel or redecorate your Store more frequently than every five years.
24. Product Purchases: will vary, depending on how quickly inventory is sold
- Due Date: As incurred.
- You must purchase your continuing supply of certain specialty food products from Beef Jerky Outlet’s affiliate and other vendors.
25. Prohibited Product or Service Fee: $250 per day of use of unauthorized products or services
- Due Date: If incurred.
- In addition to other remedies available to Beef Jerky Outlet.
26. Insurance Premiums: reimbursement of Beef Jerky Outlet’s costs, plus 10% administrative fee
- Due Date: On demand.
- If you do not maintain the required insurance coverage, Beef Jerky Outlet has the right (but not the obligation) to obtain insurance on your behalf.
27. Product or Supplier Evaluation Fee: $25 per product SKU; $100 per supplier
- Due Date: On demand, if incurred.
- If you wish to purchase any product or purchase from any supplier that Beef Jerky Outlet has not approved, you must submit the request to Beef Jerky Outlet for approval on its new item request form.
- If Beef Jerky Outlet approves the product or supplier for all Stores in the System, it reserves the right to waive the fee.
28. Management Fee: Beef Jerky Outlet’s then-current per diem fee per representative, plus expenses. Current per diem fee = $600.
- Due Date: If incurred.
- Beef Jerky Outlet may step in and manage your Store in certain circumstances, such as your death, disability, or prolonged absence.
- Beef Jerky Outlet will charge a management fee, in addition to the other fees it charges, if it manages your Store. You must reimburse its expenses.
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