If you are considering a Profile by Sanford franchise, don’t get blindsided by these 25 important franchise fees (from the initial franchise fee, to the royalty fee, to 23 other fees found in Items 5 and 6 of Profile by Sanford’s 2019 FDD).
1. Initial Franchise Fee: $49,500
- You must pay Profile by Sanford an initial franchise fee when you sign the Franchise Agreement. Profile by Sanford’s standard initial franchise fee is $49,500.
- Profile by Sanford currently discounts the initial franchise fee to $44,500 (i.e., a $5,000 discount) to veterans who have received a discharge (other than dishonorable), as well as any active-duty personnel.
2. Development Fee: see below
- If Profile by Sanford grants you the right to develop three or more units under a multi-unit area development agreement, you will sign its multi-unit area development agreement and pay it a development fee.
- The development fee is calculated as the sum of the initial franchise fees due for each unit, calculated according to the discount formula described above. For example:
- If you commit to develop three to five units within a development area, the development fee ranges from $125,000 (for three units) to $205,000 (for five units) ($45,000 for the first, plus $40,000 for each additional unit).
- If you commit to develop six to nine units within a development area, the development fee is equal to $35,000 per unit and ranges from $210,000 (for six units) to $315,000 (for nine units).
- If you commit to develop 10 or more units within a development area, the development fee is equal to $30,000 per unit: $300,000 (for 10 units), plus $30,000 for each additional unit.
3. Profile Start-Up Kit: $150,000 to $156,000 for a stand-alone store, and $56,000 to $74,000 for an in-facility store
- On or before opening, you must purchase from Profile by Sanford or from its affiliate or designee a Profile Start-Up Kit.
- The Profile Start-Up Kit includes furniture (e.g., chairs), fixtures (e.g., shelving and built-in workspace furnishings), equipment (e.g., computer system), office supplies (e.g., pens), and marketing/business development collateral (e.g., brochures) to start the franchised business.
- The current cost is estimated to be $150,000 to $156,000 for a stand-alone store, and $56,000 to $74,000 for an in-facility store, depending on the size and configuration of your premises, and this fee is non-refundable and is to be in a lump sum.
4. Initial Product Inventory, Exterior Signage: initial product inventory: $20,000 to $25,000 for a stand-alone store and $12,500 to $20,000 for an in-facility store; exterior signage: $7,500 to $12,000 for a stand-alone store and $0 to $7,500 for an in-facility store
- You must also purchase from Profile by Sanford or from its affiliate or designee your initial product inventory, exterior signage, and certain leasehold improvements (e.g., flooring, lighting, HVAC, window treatments, and graphics) that it specifies.
- The cost of the initial product inventory is currently estimated to range from $20,000 to $25,000 for a stand-alone store and $12,500 to $20,000 for an in-facility store, and is non-refundable and is to be paid in a lump sum.
- The cost of the exterior signage is currently estimated to be $7,500 to $12,000 for a stand-alone store and $0 to $7,500 for an in-facility store, and is non-refundable and may be paid in installments.
5. Specific Build-Out Materials: $136,000 to $245,000 for a stand-alone store and $36,000 to $82,000 for an in-facility store
- The current cost for leasehold improvements is estimated to be $136,000 to $245,000 for a stand-alone store and $36,000 to $82,000 for an in-facility store, and is non-refundable and may be paid in installments.
- This includes the build-out, flooring, lighting, HVAC, window treatments, and graphics.
- The contract for the build-out will be between the general contractor and the franchisee.
6. On-Site Coach Certification: if you request that training be provided on your premises, currently up to $5,000
- The Coach Training and Certification Program is offered at Profile by Sanford’s designated facility at no cost for the first five coach-certified staff members.
- However, if you request that this training be provided on your premises, you will pay Profile by Sanford an amount for such training (currently up to $5,000, subject to reasonable increase by it).
7. Royalty Fee: 5% of Gross Revenue
- Due Date: Weekly.
8. Marketing Fund Contribution: 2% of Gross Revenue
- Due Date: Weekly.
9. Multi-Area Marketing, Marketing Cooperatives, or Local Marketing: amount Profile by Sanford designates, not to exceed 2% of Gross Revenue
- Due Date: At such times and manner as Profile by Sanford specifies, or as required by any cooperative.
10. Technology Fee: then-current fees; currently estimated to be $150 per month
- Due Date: At such times and manner as Profile by Sanford specifies, currently expected to be monthly.
- Profile by Sanford has the right to impose a fee for the development and use of system technology.
11. ProfileOne (Web-based Profile Center Management System): then-current fees; currently $995 per month per franchised business (includes 4 CRM licenses, 1 Complete Management Suite, and 2 POS Device licenses). Additional user licenses range from $25-$250 per user per month, depending on the level of license required.
- Due Date: At such times and manner as Profile by Sanford specifies, currently monthly on the fifth day of each month.
- Subject to annual increase.
12. Profile Coaches – Coach Certification and Continuing Education Units (CEUs): then-current fees; currently, $250 per person for new coaches; $20 per month per coach ongoing
- Due Date: Upon demand.
- If you hire a new coach, $250 will be charged to train the new coach. A fee of $20 is charged per month per coach to maintain the certification.
13. Profile Manager Training: then-current fees; currently, $500 per person for new manager training; after 12 months, $250 per year for ongoing manager training
- Due Date: Upon demand.
- Manager training fees are in addition to required coach certifications and fees.
14. Additional or Advanced Training: then-current fees; currently, up to $1,000 per person per training session
- Due Date: Upon demand.
15. Audits: cost of audit, plus interest at the maximum rate allowable by law
- Due Date: Immediately upon receipt of invoice.
- Payable only if an audit reveals that you have underreported to Profile by Sanford.
16. Transfer Fee: 50% of the then-existing initial fee or $3,500 if transferee is a current franchisee, plus a 10% commission on the gross transfer price (excluding real property) if Profile by Sanford found the buyer for you
- Due Date: Upon application for consent to transfer.
- Payable when you transfer your franchise.
17. Renewal Fee: $5,000 for first renewal; variable for subsequent renewals
- Due Date: At least six months before the end of the initial or any renewal term.
- The fee for each subsequent renewal will be determined by the renewal agreement.
18. Damages, Liquidated Damages, Costs, and Attorneys’ Fees: will vary under circumstances
- Due Date: As incurred.
- Payable only if Profile by Sanford incurs damages or expenses, or if it prevails in arbitration or litigation.
- You pay liquidated damages of $500 per day for each day you continue to operate the Franchised Business using Profile by Sanford’s Marks or systems, after expiration, termination, or transfer.
19. Late Charges and Interest: $100 per late payment or late report, plus 18% per annum or the maximum amounts allowed by law
- Due Date: Upon demand.
- Payable if you fail to pay amounts owed to Profile by Sanford when due or file late reports.
20. Indemnification: will vary under the circumstances
- Due Date: As incurred.
- You must indemnify Profile by Sanford if it is held liable for claims by others arising out of or relating to your franchise business or your operations.
21. Supplier Review Fee: Profile by Sanford’s direct and indirect costs, subject to a minimum non-refundable fee of $2,000
- Due Date: $2,000 due upon submission of your request; remainder due as incurred.
- Profile by Sanford’s costs include third-party testing cost, and a reasonable reimbursement of its time for it to evaluate your request.
22. Upgrading, Modernization, and Maintenance Costs: your costs and expenses which will vary, but are estimated at from $500 to $5,000 annually
- Due Date: Upon demand.
- Renovation is required every five years, and six months before the time of each renewal, to Profile by Sanford’s specifications.
- You must maintain and upgrade annually Computer Systems, as Profile by Sanford may prescribe.
23. Securities Offering Costs: varies
- Due Date: Upon demand.
- If you offer securities, Profile by Sanford must review the prospectus or other offering documents and you will pay its costs. There is a minimum non-refundable fee of $5,000 that you will pay upon submitting an application for Profile by Sanford’s review.
24. Management Fees (if Profile by Sanford must operate your facility as a result of your default): Profile by Sanford’s expenses, plus $500 per franchised business per day
- Due Date: Upon demand.
- Profile by Sanford may operate one or more of your franchised businesses if you are in default under your Franchise Agreement.
25. Payments for Mandatory Goods, Services, and Programs: varies and may include reasonable processing fees
- Due Date: Upon purchase or billing.
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