If you are considering a Grease Monkey franchise, don’t get blindsided by these 18 important franchise fees (from the initial franchise fee, to the royalty fee, to 16 other fees found in Items 5 and 6 of Grease Monkey’s 2019 FDD).
1. Initial Franchise Fee: $5,000 to $30,000
- The “Initial Franchise Fee” for a single Grease Monkey Business is $30,000.
- Grease Monkey currently offers a reduced Initial Franchise Fee under the following circumstances:
- (i) If you are a Conversion Owner, Grease Monkey offers a reduced Initial Franchise Fee of $20,000. If you meet additional qualifications, you may also be eligible for a royalty rebate.
- (ii) If you are an existing franchisee and purchase additional Grease Monkey Franchises for which you sign a then-current Franchise Agreement on or before December 1, 2019, Grease Monkey offers a reduced Initial Franchise Fee of $5,000 (the “2019 Incentive Program”). If you meet additional qualifications, you may also be eligible for a royalty rebate.
- (iii) Grease Monkey participates in a veteran (“VetFran”) and first responders program. Under this program, honorably discharged United States veterans or their spouses (“Veteran”) receive a $10,000 discount on Grease Monkey’s standard Initial Franchise Fee. First responders must provide Grease Monkey with evidence of at least 24 months of continued service in their respective service. If you meet additional qualifications, you may also be eligible for a royalty rebate.
2. Development Fee: the Initial Franchise Fee for the first Grease Monkey Business and a reduced Initial Franchise Fee of $18,000 for the second Grease Monkey Business and $9,000 for each additional Grease Monkey Business you intend to develop under the Area Development Agreement
- You may also become an Area Developer and purchase the rights to open multiple Grease Monkey Businesses by signing Grease Monkey’s Area Development Agreement.
- Area Developers must open a minimum of 3 Grease Monkey Businesses. Area Developers must pay a development fee (“Development Fee”) which is equal to the Initial Franchise Fee for the first Grease Monkey Business and a reduced Initial Franchise Fee of $18,000 for the second Grease Monkey Business and $9,000 for each additional Grease Monkey Business you intend to develop under the Area Development Agreement.
- The Development Fee for the minimum 3 Grease Monkey Businesses is $57,000, unless you are a Veteran or first responder then the Development Fee for the minimum 3 Grease Monkey Businesses is $47,000, which is equal to the $10,000 discount on the standard Initial Franchise Fee, a reduced Initial Franchise Fee of $18,000 for the second Grease Monkey Business, and $9,000 for each additional Grease Monkey Business you intend to develop under the Area Development Agreement.
- The Development Fee must be paid in full when you sign the Area Development Agreement and is not refundable under any circumstances, even if you fail to meet your Development Schedule.
3. Grand Opening Costs: $10,000 to $15,000
- Grease Monkey may, but is not required to, provide certain grand opening services to you. If Grease Monkey provides such grand opening services to you, you will pay it between $10,000 and $15,000 (“Grand Opening Costs”).
- The Grand Opening Costs would be due at the time you sign the Franchise Agreement and are non-refundable once paid.
4. Royalty: 5% of Gross Revenues
- Due Date: Due on the 10th day of each month.
- The “Royalty” is based on “Gross Revenues” during the previous month. Your Royalty is an ongoing payment that allows you to use the Marks and the intellectual property of the System and pays for Grease Monkey’s ongoing support and assistance.
5. Advertising Contribution: 0.5% of Gross Revenues
- Due Date: Same as Royalty.
- This contribution is used for a system-wide “National Materials Fund” for Grease Monkey’s use in promoting and building the Grease Monkey brand.
- Grease Monkey reserves the right to increase the required contribution to 1% of Gross Revenues.
6. Audit Expenses: cost of audit and inspection, any understated amounts, and any related accounting and legal expenses
- Due Date: On demand.
- You will be required to pay this if an audit reveals that you understated monthly Gross Revenues by more than 2% or you fail to submit required reports.
7. Transfer Fee: $5,000
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- Due Date: $1,000 nonrefundable deposit (only for new franchisees) at time of transfer application submittal and the remaining balance of fee at time of the approved transfer.
- Payable in connection with the transfer of your Grease Monkey Business, a transfer of ownership of your legal entity or the Franchise Agreement.
- If you are transferring an undeveloped Center under an Area Development Agreement, the fee will be $2,000 per Center.
- This fee may increase annually based on increases in the Consumer Price Index (“CPI”).
8. Renewal Fee: $0 to $5,000
- Due Date: When you sign the then-current Franchise Agreement.
- Payable if you qualify to renew your Franchise Agreement and choose to enter into a successor Franchise Agreement.
9. Interest: lesser of 1.5% per month or highest rate of interest allowed by law
- Due Date: As incurred.
- Interest accrues from the original due date until payment is received in full.
10. Late Charges: $25
- Due Date: As incurred.
- Payable if any payment due to Grease Monkey or its affiliates is not made by the due date.
11. Local and Regional Advertising Cooperatives: established by cooperative members
- Due Date: Established by cooperative members.
12. Additional Training or Assistance Fees: will vary under circumstances
- Due Date: As incurred.
- Grease Monkey provides initial training at no charge for up to two people.
- Grease Monkey may charge you its then-current published fee for training additional persons, newly-hired personnel, refresher training courses, advanced training courses, and additional or special assistance or training you need or request.
- You are also responsible for all of your own travel-related expenses for attending training sessions.
13. Professional Fees and Expenses: will vary under circumstances
- Due Date: As incurred.
- You must reimburse Grease Monkey for any legal or accounting fees that it incurs as a result of any breach or termination of your Franchise Agreement.
- You must reimburse Grease Monkey if it is required to incur any expenses in enforcing its rights against you under the Franchise Agreement.
14. Indemnification: will vary under circumstances
- Due Date: As incurred.
- You must indemnify and reimburse Grease Monkey for any expenses or losses that it or its representatives incur related in any way to your Grease Monkey Business or Franchise.
15. Insurance: reimbursement of Grease Monkey’s costs, plus a 20% administration charge
- Due Date: On demand.
- If you fail to obtain insurance, Grease Monkey may obtain insurance for you, and you must reimburse Grease Monkey for the cost of insurance obtained, plus 20% of the premium for an administrative cost of obtaining the insurance.
- You must also list Grease Monkey, its affiliates, and others as additional insured under your policy.
16. Supplier and Product Evaluation Fee: costs of inspection (estimated to be approximately $100 to $500)
- Due Date: As incurred.
- Payable if Grease Monkey inspects a new product, service, or proposed supplier nominated by you.
17. Resale Assistance Program: $3,600
- Due Date: As incurred.
- This fee is only due if you request Grease Monkey’s assistance in the resale of your franchise to another party.
18. Broker Fees: the actual cost of the brokerage commissions, finder’s fees, or similar charges
- Due Date: As incurred.
- Payable only in connection with the transfer to a purchaser that was referred to you through a broker that is not an affiliate of Grease Monkey.
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