If you are considering a Ben’s Soft Pretzels 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 Ben’s Soft Pretzels’ 2018 FDD).
1. Initial Franchise Fee: $30,000
- The initial franchise fee for a single Store is $30,000. It is paid to Ben’s Soft Pretzels as a lump sum upon signing the Franchise Agreement, is earned upon receipt, and is not refundable.
- Ben’s Soft Pretzels also offers a program which allows for deferred payment of part of the initial franchise fee to franchisees willing to commit to open up to 3 Stores. The total initial franchise fee for this program is $65,000 (i.e., $30,000 initial franchise fee for the first Store, $20,000 initial franchise fee for the second Store, and $15,000 initial franchise fee for the third Store).
- You will sign all 3 Franchise Agreements at the same time and pay $47,500 at the time of signing ($30,000 for the initial franchise fee for the first Store, $10,000 for the first installment of the second Store, and $7,500 for the first installment of the third Store).
- You will be required to open your second Store 12 months after the opening of your first Store. You will be required to pay an additional $10,000 of the initial franchise fee at the time you sign a lease or otherwise secure a site for the location of your second Store.
- You will be required to open your third Store 18 months after the opening of your first Store. You will be required to pay the remaining $7,500 of the initial franchise fee at the time you sign a lease or otherwise secure a site for the location of your third Store.
- In addition to the above program, Ben’s Soft Pretzels will reduce the initial franchise fee for existing franchisees if they decide, during the term of a Franchise Agreement with Ben’s Soft Pretzels, to open one or more additional Stores.
- If an existing franchisee seeks to open an additional Store, Ben’s Soft Pretzels will reduce the initial franchise fee to $25,000 for the franchisee’s second and subsequent Stores. These subsequently paid initial franchise fees are payable in lump sum upon execution of the then-current form of Franchise Agreement and are not refundable under any circumstances.
- Finally, Ben’s Soft Pretzels offers a program for honorably-discharged veterans, where the initial franchise fee for the first Store is $15,000. If an honorably-discharged veteran franchisee seeks to open one additional Store, Ben’s Soft Pretzels will reduce this initial franchise fee to $10,000 for the franchisee’s second Store.
- To qualify for these reduced initial franchise fees, the veteran must own 50% or more of the franchisee entity that enters into each Franchise Agreement.
- Further, for honorably-discharged veterans, these reduced initial franchise fees are for the first two Stores only, and the fee deferral program described above is not reduced in any further amount.
2. Initial Equipment: $8,000 to $30,000
3. Inventory Purchases: $5,000
- You also must purchase from Ben’s Soft Pretzels’ affiliate, Live Large Distribution Inc., equipment at a cost of between $8,000 and $30,000 and inventory at a cost of approximately $5,000. These payments are not refundable.
4. Royalty Fee: 6% of Gross Sales
- Due Date: Payable weekly.
5. Advertising Fund: up to 4% of Gross Sales; currently, 1.5% of Gross Sales
- Due Date: Payable weekly.
6. Ongoing Training: currently $500 per day, plus cost of transportation, lodging, and other expenses
- Due Date: As incurred.
7. Convention or National Business Meeting: $500 to $1,000 per person
- Due Date: As incurred.
8. Additional Assistance: additional assistance is currently $500 per day, plus cost of transportation, lodging, and other expenses
- Due Date: As incurred.
9. Transfer Fee: one-half of the then-current initial franchise fee for a non-discounted first franchise; as well as any third-party broker fees that are due in connection with the proposed transfer
- Due Date: At time of transfer. If you transfer your franchise to your corporation or limited liability company or partnership, Ben’s Soft Pretzels charges for its legal expenses and related costs but no transfer fee is due.
10. Audit: cost of inspection or audit; currently $3,500
- Due Date: As incurred.
- Payable only if you fail to furnish reports or records or if the audit reveals you have understated your Gross Sales by more than 5%.
11. Interest: 12% per annum or the maximum contract rate of interest permitted by governing law, whichever is less
- Due Date: As incurred.
12. Late Fee: $100
- Due Date: As incurred.
- Applies to each demand for payment, non-sufficient funds checks, violation of Franchise Agreement, and the failure to provide reports and financial statements in a timely manner.
13. Telephone Service Cost: reimburse Ben’s Soft Pretzels’ costs of maintaining telephone service at the Store, if applicable
- Due Date: Monthly.
14. Equipment, Inventory, and Pretzel Mix: at the then-current charge
- Due Date: As incurred.
- You purchase some of your equipment and inventory from Ben’s Soft Pretzels’ affiliate.
- Gordon Food Service Inc. is an independent distributor who buys pretzel mix from Ben’s Soft Pretzels’ affiliate and sells it to you.
15. Sublease/Sublicense Rent: the amount specified in the respective lease, plus $200 for a Lease Administration Fee
- Due Date: Payable monthly.
- A security deposit in an amount that varies is due at the time of signing the sublease.
- Such amounts do not apply to a Mobile Store.
- Except for the $200 Lease Administration Fee, the rent is passed through to the landlord.
16. Lease Renewal Fee: reimburse Ben’s Soft Pretzels’ costs; currently, does not exceed $2,500
- Due Date: As incurred.
- Such amounts do not apply to a Mobile Store.
17. Regional Advisory Council Assessments: none currently
- Due Date: As incurred.
- The Regional Advisory Council would choose its own assessments.
18. Software: not yet specified
- Due Date: As incurred.
19. Evaluation of Suppliers: currently, $500 per day, plus reasonable expenses
- Due Date: As incurred.
- Applies only if you want Ben’s Soft Pretzels to evaluate unapproved items or suppliers for the Store.
20. Insurance: reimburse the insurance premiums and other expenses incurred by Ben’s Soft Pretzels
- Due Date: As incurred.
- You may incur additional insurance expense if operating a Mobile Store.
21. Management Fee: to be determined under circumstances; currently, $500 per day, plus reasonable expenses
- Due Date: As incurred.
- Payable during period that Ben’s Soft Pretzels’ appointed manager manages the Store upon your default, death, or disability.
22. Fines for Non-Compliance with the Manual: currently range from $25 to $500
- Due Date: As incurred.
23. Costs and Attorneys’ Fees: will vary under the circumstances
- Due Date: As incurred.
- Payable upon your failure to comply with the Franchise Agreement.
24. Indemnification: will vary under circumstances
- Due Date: As incurred.
- You have to reimburse Ben’s Soft Pretzels if it is held liable for claims arising from your operations.
25. Operating Outside Designated Area Fine: $1,000 per violation
- Due Date: As incurred.
- If you operate a Mobile Store and make sales outside your Designated Area, you must pay this fee for each violation.
- Unless otherwise noted, the fees noted above apply to a traditional or captive venue Store as well as a Mobile Store.
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