Considering a Wireless Zone Franchise? Don’t Overlook These 39 Important Franchise Fees

If you are considering a Wireless Zone franchise, don’t get blindsided by these 39 important franchise fees (from the initial franchise fee, to the royalty fee, to 37 other fees found in Items 5 and 6 of Wireless Zone’s 2018 FDD).

1.  Initial Franchise Fee:  $1,000 to $25,000

• You will pay Wireless Zone an initial franchise fee which varies from $1,000 to $25,000 based on your level of experience in the wireless and wireline sales industry and/or the location of your Store according to the following chart:

• Standard initial franchise fee:  $25,000
• For an existing Wireless Zone franchisee in good standing acquiring an additional new, start-up franchise:  $5,000
• For an existing Wireless Zone franchisee in good standing who owns 10 or more Wireless Zone franchises (including any satellite locations), acquiring an additional new, start-up franchise:  $1,000
• For an existing wireless telephone business that sells similar products and services of the Wireless Zone Provider and converts an existing retail operation into a Store:  $1,000

2.  Royalties:  not more than 22% of the Gross Profit you earn through sales at your Store

• Due Date:  Wireless Zone receives Commissions and Residuals from the Provider. Wireless Zone deducts its Royalties and other fees and charges from the Commissions and Residuals before paying you the remainder.

• If the Commissions and Residuals are insufficient to cover the amounts owed to Wireless Zone, you must pay any deficiency by the 10th day of the month.

• The 22% royalty is based on a Gross Profit of $5,000 or less in a particular month. The percentage charged as a royalty decreases for each additional $5,000 of Gross Profit in a particular month, down to 9% on all Gross Profit above $100,000 in a calendar month.

3.  New Program Fees:  a royalty or other fee payment in an amount Wireless Zone determines

• Due Date:  As Wireless Zone determines.

• Wireless Zone reserves the right to provide for an additional royalty or other form of fee payment on new programs, marketing efforts, products, services, or other revenue generating opportunities.

4.  Advertising/Marketing Contribution:  up to 5% of Gross Revenue

• Due Date:  Payable in the same manner as Royalties.

5.  Foundation Contribution:  the amount Wireless Zone designates. It currently requires that you contribute $0.25 for each account activation and upgrade transaction.

• Due Date:  When you make the customer sale.

• You must participate in all philanthropic programs Wireless Zone supports, including support for Wireless Zone Foundation for Giving, Inc.

6.  Audits:  cost of audit, plus amount of underpayment with interest on underpayment

• Due Date:  Within 10 days of billing.

• You must pay Wireless Zone’s cost of the audit fees if you understate Royalties you owe Wireless Zone by 2% or more or if you fail to produce your business books and records as Wireless Zone requests.

7.  Interest:  1.5% per month

• Due Date:  Payable to Wireless Zone on demand.

• Interest is currently charged on your outstanding balance owed to Wireless Zone at 1.5% per month, unless limited by law.

8.  Sales Tax, Use Tax, Gross Receipts Tax, Excise Tax:  the amount imposed by the taxing authority

• Due Date:  Payable to the taxing authority periodically as required by the taxing authority, or to Wireless Zone on demand.

9.  Bank Charges, Administrative Costs, and Credit Card Fees:  Wireless Zone’s then-current fees, equal to the amount of the bank or credit card company charge to Wireless Zone, plus an administrative fee; currently $35

• Due Date:  Payable to Wireless Zone on demand.

10.  Renewal Fee:  the renewal fee is $7,500

• Due Date:  3 months before expiration of Franchise Agreement.

11.  Holdover Fee:  $500 per month

• Due Date:  Upon your holding over after expiration of the Franchise Agreement when a renewal is pending.

12.  Training “No-Show” Fee:  Wireless Zone’s then-current fee; the current fee ranges from $500 to $2,000 per “no-show.” Fee range is dependent on type and duration of the training class, meeting, or seminar and you will be notified of “No-Show” fees in excess of $500 when registering for a training class, meeting, or seminar.

• Due Date:  Upon billing.

13.  Transfer Fee and Sales Commission:  transfer fee in effect at the time of transfer for your Store. Currently, the transfer fee is $5,000.

• Due Date:  On or before date of transfer to new franchisee.

14.  Software License Fees and Additional Point of Sale License:  vendor’s then-current ongoing fee per Store location. The current ongoing fee is $100 per month, which will include up to 3 point of sale licenses per Store.

• Due Date:  Upon billing.

15.  Additional E-Mail Account Fee:  Wireless Zone’s then-current fee. The current fee for each additional e-mail account and wireless product connection is $7.50 per account per month and billed annually.

• Due Date:  Upon billing.

16.  Computer Equipment, Signs, Fixtures, Kiosks, and Displays:  the then-current costs for computers, POS equipment, signs, fixtures, etc., at the time of each remodel or upgrade. Current remodel fees range from $35,000 to $70,000 or more, depending on the scope of the remodel.

• Due Date:  As incurred.

17.  Digital Video and Radio Services:  vendor’s then-current ongoing fee; the current fee ranges from $20 to $40 per month per Store. Fee range is dependent on type of services provided.

• Due Date:  Upon billing.

18.  Gift Card Program:  vendor’s then-current ongoing fee

• Due Date:  Upon billing.

• Wireless Zone does not currently operate a gift card program, but it may operate a gift card program in the future.

19.  Rewards Program:  then-current ongoing fee; current fee is $5 per month per Store

• Due Date:  Upon billing.

20.  Chatterspot:  vendor’s then-current ongoing fee. Current fee ranges from $34 to $41 per month per Store, depending on the type of services provided.

• Due Date:  Upon billing.

21.  Redux Device Drying Equipment:  vendor’s then-current monthly fee to lease the Redux drying equipment; currently the fee is $150 per month

• Due Date:  Upon billing.

22.  Culture of Good Backpacks:  variable based on the number of units purchased. The current fee is $8.29 per unit.

• Due Date:  Upon billing.

23.  New Franchisee Training Fee:  Wireless Zone’s then-current fee for additional attendees, plus you must also pay the costs of travel, lodging, meals, and additional expenses for yourself (or a proxy) and your employees; the current fee is per additional attendee

• Due Date:  Upon billing.

24.  Additional Training:  the applicable fee for individualized training, plus travel, lodging, meals, and additional expenses of Wireless Zone’s representatives, if applicable

• Due Date:  Upon billing.

25.  Convention Fee:  Wireless Zone’s then-current fee for attendance at convention

• Due Date:  30 days before Convention date.

26.  Ongoing Product Inventory Purchases (optional):  amount will vary depending upon the sales level you achieve and your delivery schedule

• Due Date:  Payment in advance, unless Wireless Zone offers you payment terms of up to 65 days.

27.  Insurance Procurement Fee:  the cost for your coverage, plus Wireless Zone’s expenses if it obtains insurance for you

• Due Date:  Payable upon invoice from insurance carrier or Wireless Zone.

28.  Cleaning Costs:  cost of cleaning services

• Due Date:  Payable upon invoice from Wireless Zone.

29.  Customer Service Charges:  will vary with the circumstances

• Due Date:  Payable upon invoice from Wireless Zone.

30.  Step-In Rights Exercise:  Wireless Zone’s costs, including attorneys’ fees; you will also pay Wireless Zone reasonable compensation which it estimates will not exceed 10% of Gross Revenue; you will also indemnify Wireless Zone

• Due Date:  As incurred.

31.  Reserve for Charge-Backs:  an amount based on historical data to fund charge-backs against commissions expected to occur months following termination or expiration of your Franchise Agreement

• Due Date:  Upon termination or expiration of your Franchise Agreement.

32.  Provider Allowances:  the amount of Provider charge-backs for signs and Store build-out allowance

• Due Date:  As incurred.

33.  Intellectual Property Infringement Liquidated Damages:  $1,000 per day

• Due Date:  As incurred.

34.  Signs, Kiosks, Displays, Inventory, and Other Wireless Zone Property Removal Costs:  Wireless Zone’s costs

• Due Date:  As incurred.

35.  Marketing Development Funds Termination Fees:  you will repay any marketing development funds you received if you (or your transferee) close your Store or otherwise terminate your Franchise Agreement after beginning operations within a time period specified by a Provider

• Due Date:  Upon termination or expiration of your Franchise Agreement or upon failing to achieve the required minimum number of net activations of post-pay service.

36.  Non-Competition and Non-Disclosure Damages and Costs:  $100,000 for each violation, plus Wireless Zone’s attorneys’ fees and costs for enforcement

• Due Date:  As incurred.

37.  Indemnification:  amount of loss or damages, plus costs

• Due Date:  As incurred.

38.  Cure of Lease Defaults and Reletting Expenses:  amount Wireless Zone must pay to cure your defaults, plus its costs to acquire possession of your Store premises and relet them to another franchisee

• Due Date:  As incurred.

39.  Attorneys’ Fees:  varies

• Due Date:  As incurred.