If you are considering a GarageExperts franchise, don’t get blindsided by these 33 important franchise fees (from the initial franchise fee, to the royalty fee, to 31 other fees found in Items 5 and 6 of GarageExperts’ 2019 FDD).
1. Initial Franchise Fee: $15,000 per territory
- The initial franchise fee for a new franchise is $15,000 per territory, with additional contiguous territories available for purchase, if approved, for $10,000 per territory.
- GarageExperts offers a 10% discount on the initial franchise fee for a Veteran honorably discharged from any branch of the U.S. armed forces within 10 years of applying for a franchise with GarageExperts.
- The initial franchise fee for the number of territories purchased, with one as a minimum, is due to GarageExperts in full when you return to it signed copies of your Franchise Agreement, and before you attend initial training.
- The initial franchise fee is fully earned when paid and is not refundable.
- In addition, if you do not earn total gross sales of $750,000 in the first three years of operation following the effective date of the Franchise Agreement, and you have been operating in compliance with your Franchise Agreement and the Operations Manual, then GarageExperts will refund to you $15,000 of the initial franchise fee through a Royalty Holiday, meaning that you will not pay Continuing Royalties of $1,800/month for 8 1/3 months.
2. Installation Equipment and Computer Hardware and Software: $20,377
- You must also pay to GarageExperts’ affiliate, Versatile Building Products, LLC (“VBP”), approximately $20,377 for installation equipment and computer hardware and software.
- These fees are refundable, less a 20% restocking fee, if you return these items unused to VBP.
3. Option Fee: $2,500 per territory
- GarageExperts may allow you to enter into an Option Agreement for the one year right to purchase one or more additional territories for $2,500 per territory. GarageExperts credits the $2,500 option fee against your initial franchise fee if you purchase the territory.
- GarageExperts refunds the Option Fee to you if it cancels the Option Agreement before the one-year term has expired because it has decided to sell the territory to another prospect.
4. Minimum Purchase Requirements: $120,000 per year per territory
- Due Date: As invoiced.
- You must purchase from VBP these amounts of cabinets, floor coatings, floor coverings, racking, modular storage systems, accessories, specialized application tools, industrial floor coatings, and supplies during each “Agreement Year” of your Franchise Agreement.
- You must increase your purchase amount $5,000 annually.
- The Minimum Purchase Requirements will apply regardless of whether you choose to maintain an inventory.
- VPB offers a 12% discount on product purchases of products that it manufactures and a Discount Reward Badge program that may lower this cost.
5. Renewal Fee: $5,000 for 1 territory; $2,500 for any additional territories you may own
- Due Date: Upon signing a successor Franchise Agreement.
- Provided that GarageExperts is then offering franchises in the same state in which the trade area is located, you shall have the right at the expiration of the term to enter into a new, then-current Franchise Agreement.
6. Fee to Cure Breach of Lease: actual expenses incurred
- Due Date: Upon demand.
- Any sum expended by GarageExperts or the power of attorney to cure your breach of your Lease shall be deemed additional sums due GarageExperts.
7. Required Equipment: all required equipment, inventory, supplies, materials, and signs shall be obtained by you at your sole cost
- Due Date: Upon demand.
8. Continuing Royalty: you pay a monthly continuing royalty as follows: $500 for first 6 months after the Effective Date of your Franchise Agreement; $800/month for months 7-12; $1,200/month for months 13-18; $1,800/month thereafter
- Due Date: Payable by the 15th day of each calendar month.
- Royalty is for any whole or partial month.
9. National Advertising Fee: $500/month until GarageExperts’ U.S. franchisee territory count is 125 or more, then $1,000/ month
- Due Date: Monthly.
- You agree to pay this fee to GarageExperts after your territory has been operational for one year.
- Once GarageExperts has achieved a given tier in the advertising fee schedule, it will not revert to a prior tier even if the number of franchises decreases.
10. Hotspot and Cellular Phone Number Fee: approximately $50-$100 per month
- Due Date: Monthly.
- You must obtain and pay a third-party vendor for a hotspot and cellular telephone per GarageExperts guidelines.
11. Trackable Phone Numbers: $2 per number plus 6 cents per minute for regular phone numbers, and $4 per number plus 10 cents per minute for toll-free numbers
- Due Date: End of each calendar year.
- You must pay to GarageExperts its current fees for Trackable Phone Numbers to monitor the source of incoming calls.
12. Amounts Advanced: you shall pay to GarageExperts all amounts advanced by it or which it has paid on behalf of you for any reason whatsoever
- Due Date: On demand.
13. Trade Area Infringement Fee: 1st Violation: $500 plus invoice amount of goods or services provided and/or rendered within the other franchisee’s trade area. 2nd Violation: $1,000 plus invoice amount of goods or services provided and/or rendered within the other franchisee’s trade area. 3rd and Subsequent Violations: $5,000 plus invoice amount of goods or services provided and/or rendered within the other franchisee’s trade area.
- Due Date: On demand and within 5 days of receiving a written demand.
- For purposes of the Infringement Fee, trade area infringement occurs if you generate income from a customer by receiving payment for goods and/or services provided and/or rendered within the trade area of another GarageExperts, without first obtaining written permission from GarageExperts and that franchisee.
- GarageExperts may also terminate your franchise if you infringe on the trade area of another GarageExperts franchisee 3 or more times during the term of your Franchise Agreement.
14. Non-Compliance Fees: varies
- Due Date: As incurred.
- If you do not comply with certain sections of your Franchise Agreement, you agree to pay these fees to GarageExperts.
15. Call Center Fees: currently projected at $1.40 per minute of call time
- Due Date: Monthly.
- You agree to use GarageExperts’ Call Center to handle your incoming digital and telephone customer leads, pursuant to GarageExperts’ guidelines. You agree to pay to GarageExperts or a third party such fees as GarageExperts charges from time to time for these services.
16. Late Fee: $50, plus $20 per day payment is late
- Due Date: Upon demand.
- Due only if you are late in paying any amounts owed to GarageExperts.
17. Charges for Unpaid Checks, Drafts, or Electronic Payments: GarageExperts’ costs and expenses arising from the nonpayment, including bank fees in the amount of at least $50
- Due Date: Upon demand.
- Payable only if any check, draft, electronic, or other payment is unpaid because of insufficient funds or otherwise.
18. Client Refunds: actual amount of refund
- Due Date: Upon demand.
- If you do not resolve a customer service complaint and GarageExperts believes a reasonable basis exists for a refund to the customer of all or a portion of the customer’s fees, then GarageExperts may make the refund and bill you.
19. Brand Reputation Protection Fee: $20 per month on your first territory; $10 per month per territory on additional territories
- Due Date: Monthly.
- You agree to pay to GarageExperts $20 per month on the first territory you own and $10 per month on each additional territory you own so that GarageExperts may reimburse customers with complaints on territories that are closed and protect the goodwill of its brand name.
20. Training Courses: GarageExperts’ then-current charge, currently $0 per person per day
- Due Date: As requested.
- GarageExperts provides an initial training program and additional training programs upon request (and subject to its scheduling requirements) for up to 2 persons at no charge. GarageExperts may charge a fee for any additional personnel that attend the initial training program.
21. Annual Convention Attendance Fee: $500 per person
- Due Date: Before attending.
- You must pay to GarageExperts $500 per person to attend its Annual Convention.
22. 3D Software Support Fee: $250 (or then-current price)
- Due Date: Annually.
- You pay this fee to GarageExperts’ affiliate, VBP, for 3D software support.
23. National Account Administration Fee: not to exceed 10% of Gross Sales which you earn resulting from performance of services to National Accounts
- Due Date: On demand.
- Payable only if you elect to participate in GarageExperts’ National Account program and you service National Accounts in your trade area.
24. Local Advertising: during each calendar quarter, you shall expend an amount equal to not less than 5% of your Gross Sales for the preceding calendar quarter for permitted local advertising and promotion related to the Franchised Business
- Due Date: Each calendar quarter.
- Local advertising does not include the cost of your listings in any telephone or internet directories distributed or available in your trade area.
25. Promotional Materials: then-current price; typically between $.16 and $200 per item
- Due Date: On demand.
- You must participate in promotional campaigns GarageExperts may establish.
26. Supplier Approvals: all costs that GarageExperts incurs to review and evaluate the proposed supplier, typically between $1,000 and $5,000
- Due Date: On demand.
- Payable by your or the proposed supplier only if you ask GarageExperts to approve a supplier.
27. Modification of Marks: your actual cost incurred to change Marks, commercial symbols, or trade dress
- Due Date: Within 60 days after notice by company.
- From time to time, GarageExperts may add to, delete, or modify any or all of the Marks and Trade Dress. You shall use, or cease using, the Marks and/or trade dress at your expense.
28. Transfer/Assignment: $5,000 plus GarageExperts’ then-current training fees, plus its out of pocket costs and travel expenses
- Due Date: Upon submission of your request to transfer or assign.
- Payable when you transfer your franchise or upon any “Assignment” as defined in the Franchise Agreement.
29. Change in Information of a Business Entity Franchisee: $2,500
- Due Date: On demand.
- Information regarding the owners and principal officers of entity franchisees must be updated when changes occur by revising Schedule 2 to the Franchise Agreement.
30. Default Reimbursement: actual costs incurred
- Due Date: Within 5 days after you cure the default.
- You must reimburse GarageExperts’ costs and expenses arising from your default under the Franchise Agreement, including reasonable legal fees and reasonable hourly charges of its administrative employees.
31. Termination: all amounts owing to GarageExperts and its affiliates
- Due Date: Upon termination or expiration of Franchise Agreement.
- Upon termination or expiration of Franchise Agreement, GarageExperts may retain all fees paid pursuant to the Agreement and you shall immediately pay any and all amounts owed by you to GarageExperts.
32. Insurance: then-current price
- Due Date: When incurred.
- You shall obtain and maintain insurance which designates GarageExperts and its designated affiliates as additional named insureds, with an insurance company approved by GarageExperts in the minimum coverage types and levels, deductible maximums, and policy limits as specified in the Manuals.
33. Attorney Fees and Expenses: varies
- Due Date: When incurred.
- If GarageExperts is a substantially prevailing party as to any claims, you agree to reimburse GarageExperts its attorney fees and costs.
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