If you are considering a Bloomin’ Blinds 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 Bloomin’ Blinds’ 2019 FDD).
1. Franchise Fee: $40,000
- When you sign your Franchise Agreement, you must pay Bloomin’ Blinds $40,000 as the initial franchise fee.
- If you purchase a second territory which is contiguous to your first territory, your fee for the second territory will be $10,000 less than the then-current initial franchise fee.
- The initial franchise fee is non-refundable.
2. Start-Up Expenses: $8,500
- When you sign your Franchise Agreement, you must pay Bloomin’ Blinds a fee of $8,500 for certain start-up expenses (which is in addition to the initial franchise fee).
- The items covered by this fee are: (1) hotel costs during your initial training (but not other travel costs); (2) initial inventory of parts, which would otherwise cost you approximately $3,500; (3) selected sample books from Bloomin’ Blinds’ preferred manufacturers; (4) 2 personalized uniform shirts with Bloomin’ Blinds’ logo (per trainee); and (5) 1,000 business cards.
- If you are already a franchisee, you may not be required to purchase these items or pay this fee.
3. Royalty: 6% of your gross sales (except that the royalty fee for sales of plantation shutters is 3%); maximum of $6,000 per month per territory; after year 1, minimum of $500 per month
- Due Date: Monthly, on the last business day of the following month.
4. Marketing Fund Contribution: you must contribute at least 2% of gross sales or $300 per month (whichever is greater)
- Due Date: Monthly, on the last business day of the following month.
5. Market Cooperative Contribution: as determined by co-op. Currently, none.
- Due Date: Monthly, on the last business day of the following month.
- Bloomin’ Blinds has the right to establish local or regional advertising cooperatives.
6. Local Advertising Requirement: you must spend at least 2% of gross sales or $1,000 per month (whichever is greater) on marketing your business
- Due Date: Per vendor.
- If you do not spend the required minimum, then Bloomin’ Blinds can require you to pay this shortfall to it.
7. Internet Marketing: currently, $350 per month
- Due Date: Per vendor.
- This amount does not count towards your local advertising requirement.
8. Replacement/Additional Training Fee: currently, $5,000 per person
- Due Date: Prior to attending training.
- If you send a manager or other employee to Bloomin’ Blinds’ training program after you open, Bloomin’ Blinds will charge its then-current training fee.
9. Vendors: pass-through of costs, plus reasonable administrative charge. Currently, none.
- Due Date: Varies.
- Bloomin’ Blinds has the right to require franchisees to use third-party vendors and suppliers that it designates. Examples can include computer support vendors, mystery shopping, and customer feedback systems.
- The vendors and suppliers may bill franchisees directly, or Bloomin’ Blinds has the right to collect payment for these vendors together with a reasonable markup or charge for administering the payment program.
10. Software Subscription: currently, $150 per month
- Due Date: Monthly.
- Bloomin’ Blinds requires you to use certain software as described in Item 11.
11. Non-Compliance Fee: $500
- Due Date: On demand.
- Bloomin’ Blinds may charge you $500 if your business is not in compliance with its system specifications or the Franchise Agreement and you fail to correct the non-compliance after 30 days’ notice.
- Thereafter, Bloomin’ Blinds may charge you $250 per week until you correct such non-compliance.
12. Reimbursement: amount that Bloomin’ Blinds spends on your behalf, plus 10%
- Due Date: Within 15 days of invoice.
- If Bloomin’ Blinds pays any amount that you owe or are required to pay to a third party, you must reimburse Bloomin’ Blinds.
13. Late Fee: $200 per billing cycle, plus compounded interest on the unpaid amount at a rate equal to 1.5% per month (or, if such payment exceeds the maximum allowed by law, then interest at the highest rate allowed by law)
- Due Date: On demand.
- Bloomin’ Blinds may charge a late fee and interest if you fail to make a required payment when due.
14. Insufficient Funds Fee: $200 (or, if such amount exceeds the maximum allowed by law, then the maximum allowed by law)
- Due Date: On demand.
- Bloomin’ Blinds may charge an insufficient funds fee if a payment made by you is returned because of insufficient funds in your account.
15. Costs of Collection: Bloomin’ Blinds’ actual costs
- Due Date: As incurred.
- Payable if Bloomin’ Blinds incurs costs (including reasonable attorney fees) in attempting to collect amounts you owe to it.
16. Breach of Territory Fee: the greater of (i) $3,000 or (ii) 75% of the amount paid by the customer in the territory of another franchisee
- Due Date: On demand.
- If you serve a customer inside the territory of another Bloomin’ Blinds business, Bloomin’ Blinds may impose this fee (as well as other remedies it has for your breach of the Franchise Agreement).
17. Special Support Fee: Bloomin’ Blinds’ then-current fee, plus its expenses. Currently, $500 per day.
- Due Date: On demand.
- If Bloomin’ Blinds provides in-person support to you in response to your request, it may charge this fee plus any out-of-pocket expenses (such as travel, lodging, and meals for employees providing onsite support).
18. Customer Complaint Resolution: $100, plus Bloomin’ Blinds’ expenses
- Due Date: On demand.
- Bloomin’ Blinds may take any action it deems appropriate to resolve a customer complaint about your business. If Bloomin’ Blinds responds to a customer complaint, it may require you to reimburse it for its expenses and to pay this fee.
19. Records Audit: Bloomin’ Blinds’ actual cost
- Due Date: On demand.
- Payable only if (1) Bloomin’ Blinds audits you because you have failed to submit required reports or other non-compliance, or (2) the audit concludes that you under-reported gross sales by more than 3% for any month.
20. Inspection Fee: currently $600, plus Bloomin’ Blinds’ out-of-pocket costs
- Due Date: On demand.
- Payable only if Bloomin’ Blinds conducts an inspection of your business because of a governmental report, customer complaint, or other customer feedback, or your default or non-compliance with any system specification.
21. Non-Compliance Cure Costs and Fee: Bloomin’ Blinds’ out-of-pocket costs and internal cost allocation, plus 10%
- Due Date: When billed.
- Bloomin’ Blinds may cure your non-compliance on your behalf (for example, if you do not have required insurance, Bloomin’ Blinds may purchase insurance for you), and you will owe Bloomin’ Blinds’ costs plus a 10% administrative fee.
22. Transfer Fee: $10,000, plus any broker fees and other out-of-pocket costs Bloomin’ Blinds incurs
- Due Date: When transfer occurs.
- Payable if you sell your business.
23. Liquidated Damages: an amount equal to royalty fees and marketing fund contributions for the lesser of (i) 2 years or (ii) the remaining months of the franchise term
- Due Date: On demand.
- Payable if Bloomin’ Blinds terminates your Franchise Agreement because of your default, or if you terminate the Franchise Agreement without the right to do so.
24. Indemnity: Bloomin’ Blinds’ costs and losses from any legal action related to the operation of your franchise
- Due Date: On demand.
- You must indemnify and defend (with counsel reasonably acceptable to Bloomin’ Blinds) Bloomin’ Blinds and its affiliates against all losses in any action by or against Bloomin’ Blinds related to, or alleged to arise out of, the operation of your franchise (unless caused by Bloomin’ Blinds’ misconduct or negligence).
25. Prevailing Party’s Legal Costs: Bloomin’ Blinds’ attorney fees, court costs, and other expenses of a legal proceeding, if it is the prevailing party
- Due Date: On demand.
- In any legal proceeding (including arbitration), the losing party must pay the prevailing party’s attorney fees, court costs, and other expenses.
Leave a Reply