If you are considering a Units Moving and Portable Storage 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 Units Moving and Portable Storage’s 2018 FDD).
1. Initial Franchise Fee: $18,500 times the number of contiguous markets you agree to purchase (minimum of three contiguous markets)
- You must pay an initial franchise fee (“Initial Franchise Fee”) equal to $18,500 times the number of contiguous markets you agree to purchase (each, a “Market”).
- Each Market will contain approximately 100,000 people and you must purchase a minimum of three contiguous Markets (for a minimum population of 300,000) within which to operate the Franchised Business, which equals a minimum Initial Franchise Fee of $55,500.
- The Initial Franchise Fee is payment, in part, for the franchisor’s expenses in furnishing assistance and services to you and for its costs, including general sales and marketing expenses, training, legal, accounting, and other professional fees.
2. Units Containers and Units Equipment: $301,322 to $565,322
- The franchisor is an approved supplier for fully outfitted trucks, proprietary Units Containers, Units Moving and Portable Storage Delivery Systems, other equipment, and inventory items such as packing and moving supplies, as well as certain inventory items and signage.
- Your estimated additional payments to the franchisor prior to opening for Units Containers and other Units Equipment range from $301,322 to $565,322, based on the number of Units Containers or other Units Equipment you are required to purchase from the franchisor.
- All initial fees are deemed fully earned upon payment, non-refundable, and must be paid in lump sum.
3. Royalty Fee: for the first year of operation, 6% of Gross Sales per month; for years 2 to 10 of operation, 8% of Gross Sales per month
- Due Date: Monthly.
- This fee is payable to the franchisor.
4. National Advertising Fund: up to 2% of Gross Sales
- Due Date: Monthly.
- National Advertising Fund contributions will be collected in the same manner as the Royalty Fee.
- This fee is payable to the franchisor.
5. Cooperative Advertising: any portion or all of the National Advertising Fund Contribution may be re-designated for Cooperative Advertising
- Due Date: As directed.
- The franchisor may establish a cooperative within your regional marketing area.
- Payable to the Cooperative Advertising escrow account which the franchisor will open.
6. Ongoing Purchases of Units Containers and Equipment: will vary under the circumstances depending on size of territory
- Due Date: Time of purchases.
- You will regularly purchase packing and moving supplies from the franchisor or its pre-approved suppliers.
- Periodically, you may need to replace or increase your inventory of mobile, modular self-storage containers, Units Portable Storage Delivery System equipment, trucks, trailers, marketing and advertising materials, and other items the franchisor furnishes.
7. Software and Support: $200 to $400
- Due Date: Monthly.
- This fee is payable to the franchisor’s designated third-party supplier.
8. SiteLink: will vary depending on the size of the operation
- Due Date: Monthly.
- This fee is payable to SiteLink for use of their software. The franchisor reserves the right to collect this payment directly.
9. Local Advertising: $3,000 to $6,000 per month
- Due Date: Monthly.
- The franchisor must approve all advertising prior to use.
- This fee is payable to the franchisor, and varies according to your territory size.
10. Audit Expenses: reasonable costs and expenses of audit
- Due Date: Upon demand.
- You will reimburse the franchisor for all the cost of an audit only if the audit shows an understatement in amounts due of at least 3%.
11. Late Fees: 18% per annum or the highest rate allowed by law (whichever is less), plus collection
costs
- Due Date: Upon demand.
- Applies to all untimely Royalty Fee payments or National Advertising Fund contributions for revenue received by you directly, and any past due amounts for purchases from the franchisor or its affiliate. Also applies to any understatement in amounts due revealed by an audit.
- This fee is payable to the franchisor.
12. Supplier or Product Approval: all reasonable costs of evaluation
- Due Date: Time of evaluation.
- You must pay the franchisor for all expenses it incurs in evaluating new suppliers or products you wish to use or purchase that it has not previously approved, regardless of whether it subsequently approves such supplier.
13. Insurance Policies: amount of unpaid premiums, plus the franchisor’s expenses in obtaining coverage for you
- Due Date: Upon demand.
- Payable only if you fail to maintain required insurance coverage and the franchisor elects to obtain coverage for you.
- You must also participate in any captive insurance program designated by the franchisor.
14. Renewal Fee: $1,000
- Due Date: 120 days before expiration of the Franchise Agreement.
15. Transfer Fee: $15,000
- Due Date: Time of transfer.
- This fee does not apply to any transfer under Section 17.3 of the Franchise Agreement.
- This fee is payable to the franchisor.
16. Additional Training and National Conference: market rates as published in the Manual; plus the franchisor’s expenses and your expenses as well as your employees’ expenses in attending
- Due Date: As invoiced.
- The franchisor conducts a one-week initial training program for your Designated Manager, which is you if you are an individual, and one additional person. The cost of this initial training program is included in the Franchise Fee.
- You pay for additional training if you request it and the franchisor agrees to provide it, or if the franchisor determines that your Designated Manager turnover is excessive.
- You must also attend any national convention that the franchisor designates.
17. Additional Assistance: market rates as published in the Manual; currently $400 per day, plus the franchisor’s expenses
- Due Date: Time of service.
- The franchisor provides one of its representatives to assist you for five days at the beginning of operations of the Franchised Business.
- You pay the franchisor for the additional assistance if you request it.
18. Ongoing Training: you must pay your expenses as well as your employees’ expenses in attending these programs
- Due Date: Time of program.
- The franchisor does not charge for ongoing training programs, but you must pay your own expenses in attending.
- These fees are payable to third parties.
19. System Modifications: you must pay all costs associated with any modifications to the System which the franchisor may specify periodically
- Due Date: As required.
- You may incur costs associated with any System modifications, including new equipment, fixtures, software, trademarks, etc.
- These fees are payable to third parties.
20. Cost of Enforcement: all costs, including attorneys’ fees
- Due Date: Upon demand.
- You will reimburse the franchisor for all costs in enforcing obligations if it prevails.
21. Indemnification: all costs, including attorneys’ fees
- Due Date: Upon demand.
- You must defend lawsuits at your cost and hold the franchisor harmless against lawsuits arising from your operation of the Franchised Business.
- These fees are payable to third parties.
22. Post-Termination and Post-Expiration Expenses: costs and expenses associated with your ceasing of and de-identification with the business
- Due Date: When incurred.
- Upon termination, expiration, non-renewal, and/or transfer of the Franchised Business for any reason, you must pay for all costs and expenses associated with ceasing operations and de-identifying yourself with the Franchised Business and System.
- These fees are payable to third parties.
23. Failure to Attend Units’ Bi-Annual Leadership Conference: $1,000
- Due Date: As required.
- In the event you fail to attend the Bi-Annual Conference, you will incur a fee of $1,000 payable to the franchisor upon demand.
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