Considering a Fastest Labs Franchise? Don’t Overlook These 26 Important Franchise Fees

Updated August 9, 2020.

If you are considering a Fastest Labs franchise, don’t get blindsided by these 26 important franchise fees (from the initial franchise fee, to the royalty fee, to 24 other fees found in Items 5 and 6 of Fastest Labs’ 2020 FDD).

1.  Initial Franchise Fee:  $40,000 to $49,500

• The “Initial Franchise Fee” for a single Fastest Labs Business is $49,500. The Initial Franchise Fee is payable when you sign the Franchise Agreement in a lump sum unless you sign a “Deposit Agreement”.

• If you purchase a second Fastest Labs Business at the same time, you will pay a reduced Initial Franchise Fee of $40,000 for the second Fastest Labs Business.

• The Initial Franchise Fee is payment for all of Fastest Labs’ pre-opening assistance that it provides to allow you to open your Fastest Labs Business and also offsets some of its franchisee recruitment expenses.

• The Initial Franchise Fee is uniform, fully earned when paid, and, except as provided below, is not refundable under any circumstances.

2.  Deposit (optional):  $17,500

• Before you sign the Franchise Agreement and at least 14 calendar days after you receive a Franchise Disclosure Document, Fastest Labs may allow you to enter into a “Deposit Agreement” with it. The Deposit Agreement will require you to make a deposit payment of $17,500 to reserve a general territory for your Fastest Labs Business.

• If you sign a Franchise Agreement, Fastest Labs will apply the deposit payment of $17,500 towards the Initial Franchise Fee.

• Fastest Labs will refund $12,500 if you wish to withdraw your request to be considered as a franchisee, provided your request is made to Fastest Labs within 90 days of the date of the Deposit Agreement.

• The entire deposit payment of $17,500 will be refunded to you if Fastest Labs decides, at its sole discretion, not to approve you as a franchisee.

3.  Territory Reservation Fee:  $15,000

• You may also reserve additional territories by paying a territory reservation fee of $15,000 per territory (“Territory Reservation Fee”) at the time you sign the Franchise Agreement for your initial Fastest Labs Business, provided Fastest Labs agrees to your request.

• The Territory Reservation Fee will be applied to the Initial Franchise Fee if you execute a new Franchise Agreement for an additional Fastest Labs Business within two years of signing the Franchise Agreement for your initial Fastest Labs Business.

• There is no Initial Franchise Fee discount for opening a second Fastest Labs franchise under the Territory Reservation Fee, and you will pay Fastest Labs’ then-current Initial Franchise Fee.

• The Territory Reservation Fee is uniform and nonrefundable, even if you do not open an additional Fastest Labs Business.

4.  Royalty Fee:  7% of Gross Revenue

• Due Date:  Due on or before the 10th day of each month.

• Paid by electronic funds transfer (“EFT”).

• The “Royalty Fee” is not required until the 31st day of the operation of your Fastest Labs Business.

• Your Royalty Fee is an ongoing payment that allows you to use the Marks and the intellectual property of the System and pays for Fastest Labs’ ongoing support and assistance.

5.  National Brand Fund:  up to 2% of monthly Gross Revenue

• Due Date: Payable on or before the 1st and 16th day of each month.

• Once established, this contribution will be used for a system-wide “National Brand Fund” for Fastest Labs’ use in promoting and building the Fastest Labs System.

6.  Regional or Local Advertising Cooperatives:  established by cooperative members, up to 2% of Gross Revenue

• Due Date:  Established by cooperative members.

• Fastest Labs currently does not have a cooperative, but reserves the right to require one to be established in the future.

7.  Initial Training Fee:  $1,500 per additional person, plus $1,000 for each additional hotel room

• Due Date:  Prior to commencement of initial training.

• Only paid if more than two people attend initial training. This fee will vary depending on the number of hotel rooms used by the trainees.

8.  Supplemental Training at Your Facility:  $500 per day, per trainer, plus expenses of the training staff

• Due Date:  30 days after billing.

• Additional training may be requested by franchisees or may be required by Fastest Labs in its sole discretion.

9.  Transfer Fee:  $10,000

• Due Date:  $1,000 nonrefundable deposit at time of transfer application submittal and the remaining balance of fee at time of the approved transfer.

• Payable by either the transferee or transferor at the time ownership of the franchise is transferred.

10.  Technology Fee:  then-current monthly fee (currently $200 per month)

• Due Date:  Same as Royalty Fee.

• This fee covers certain technologies used in the operation of your Fastest Labs Business.

• Fastest Labs reserves the right to upgrade, modify, and add new technologies and software. You will be responsible for any increase in fees that result from any upgrades, modifications, or additional software or from increases from third-party vendors.

11.  Tablet Membership Fee:  then-current monthly fee per tablet (not currently charged)

• Due Date:  Same as Royalty Fee.

• Fastest Labs reserves the right upon 30 days’ notice to charge a “Tablet Membership Fee” for access to its proprietary automated testing software system.

• If charged, Fastest Labs estimates this fee to be between $60 and $299 per tablet based on configuration.

12.  Audit Fee:  cost of audit, including travel expenses, plus interest on amount of any underpayment

• Due Date:  As requested.

• Payable only if audit shows an understatement of at least 2% of Gross Revenue for any month.

13.  Renewal Fee:  $5,000

• Due Date:  At the time you sign the new Franchise Agreement.

• Payable if you qualify to renew your Franchise Agreement and choose to enter into a successor Franchise Agreement.

14.  Payment Service Fees:  up to 3% of total charge

• Due Date:  As incurred.

• If payment is made to Fastest Labs or its affiliates by credit card for any fee required, Fastest Labs may charge a service charge of up to 3% of the total charge.

15.  Interest Fee:  the greater of prime plus 3%, or 12%, but not more than the maximum allowed by law

• Due Date:  30 days after billing.

• Interest is charged on any unpaid royalty, advertising, transfer, and other fees not received by the due date.

16.  Insurance Fee:  reimbursement of Fastest Labs’ costs, plus a $500 administration charge

• Due Date:  On demand.

• If you fail to obtain insurance, Fastest Labs may obtain insurance for you, and you must reimburse Fastest Labs for the cost of insurance obtained plus a $500 administration fee for obtaining the insurance on your behalf.

17.  Relocation Fee:  Fastest Labs’ costs

• Due Date:  Upon relocation.

• You must reimburse Fastest Labs for its reasonable expenses if it permits you to relocate your Fastest Labs Business. Fastest Labs will provide you with copies of its invoices for its expenses from any third-party providers upon request.

18.  Convention Fee:  the then-current fee (currently estimated to be $199 to $499 per person)

• Due Date:  Upon demand.

• Payable to Fastest Labs to help defray the cost of your attendance at any annual convention that it may choose to hold. This fee is due whether or not you attend Fastest Labs’ annual convention in any given year.

19.  Internet Marketing Search Engine Optimization:  $1,000 per month for your first six months in operation; and beginning in the seventh month of operation, you must spend a minimum of $300 per month

• Due Date:  As requested.

• These payments must be made directly to the service provider. If you fail to make these payments, you must pay the difference to Fastest Labs.

20.  Liquidated Damages:  will vary under the circumstances

• Due Date:  Within 15 days after termination of the Franchise Agreement.

• Due only if Fastest Labs terminates the Franchise Agreement before the end of the term because of your material breach, or you terminate the Franchise Agreement without legal cause.

21.  Indemnification:  will vary under circumstances

• Due Date:  As incurred.

• You must indemnify and reimburse Fastest Labs for any expenses or losses that it or its representatives incur related in any way to your Fastest Labs Business or Franchise.

22.  Non-Sufficient Funds Fee:  $100 per occurrence

• Due Date:  As incurred.

• Payable if any check or electronic payment is not successful due to insufficient funds, stop payment, or any similar event.

23.  Management Fee:  $500 per day, plus costs and expenses

• Due Date:  As incurred.

• Payable if Fastest Labs or its affiliate manages the Fastest Labs Business because you are in breach of the Franchise Agreement, abandon the Fastest Labs Business, Fastest Labs deems you incapable of operating the Fastest Labs Business, or following your death or disability.

24.  Professional Fees and Expenses:  will vary under circumstances

• Due Date:  As incurred.

• You must reimburse Fastest Labs for any legal or accounting fees that it incurs as a result of any breach or termination of your Franchise Agreement. You must reimburse Fastest Labs if it is required to incur any expenses in enforcing its rights against you under the Franchise Agreement.

• You will also be required to pay any professional fees that Fastest Labs incurs for certain transfers.

25.  Customer Issue Resolution:  varies; reasonable costs Fastest Labs incurs for responding to a customer complaint, which will typically be between $20 and $100

• Due Date:  Upon demand.

• Payable if a customer of the Fastest Labs Business contacts Fastest Labs with a complaint and Fastest Labs provides a gift card, refund, or other value to the customer as part of its addressing the issue.

26.  Broker Fees:  Fastest Labs’ actual cost of the brokerage commissions, finder’s fees, or similar charges

• Due Date:  As incurred.

• If you transfer your Fastest Labs Business to a third party or purchaser, you must reimburse all of Fastest Labs’ actual costs for commissions, finder’s fees, and similar charges.