Considering a Kitchen Solvers Franchise? Don’t Overlook These 15 Important Franchise Fees

If you are considering a Kitchen Solvers franchise, don’t get blindsided by these 15 important franchise fees (from the initial franchise fee, to the royalty fee, to 13 other fees found in Items 5 and 6 of Kitchen Solvers’ 2020 FDD).

1.  Initial Franchise Fee:  $30,000 to $60,000

• At the time you sign your Franchise Agreement, you must pay Kitchen Solvers a nonrefundable Initial Franchise Fee of $60,000. The Initial Franchise Fee is earned upon receipt and not refundable under any circumstances. The Initial Franchise Fee includes your rights to your initial Territory.

• If you license multiple contiguous Territories from Kitchen Solvers at the same time (for which you are signing separate Franchise Agreements), the Initial Franchise Fee: (i) under the second Franchise Agreement will be reduced to $45,000 (i.e., a total Initial Franchise Fee of $105,000 for the two Territories); (ii) under the third Franchise Agreement will be reduced to $35,000 (i.e., a total Initial Franchise Fee of $140,000 for the three Territories); and (iii) under the fourth and each additional Franchise Agreement will be reduced to $30,000 (i.e., a total Initial Franchise Fee of $170,000 for four Territories, plus $30,000 for each additional Franchise Agreement thereafter).

• If you subsequently license an additional contiguous Territory from Kitchen Solvers in the future (for which you are signing a separate Franchise Agreement), then you may be entitled to Kitchen Solvers’ then-current contiguous multi-territory discount that Kitchen Solvers offers at that time, if any.

2.  Additional Population Fee:  the number of owner-occupied households in your Territory in excess of 80,000 multiplied by 75 cents

• If Kitchen Solvers permits you to purchase additional contiguous zip codes for a specific Territory so that the Territory exceeds 80,000 owner-occupied households, then you must pay Kitchen Solvers an additional fee in an amount equal to the number of owner-occupied households in your Territory in excess of 80,000 multiplied by 75 cents ($0.75) (the “Additional Population Fee”).

• The Additional Population Fee is earned upon receipt and not refundable under any circumstances.

• You may not purchase any additional zip codes so that the number of owner-occupied households in any individual Territory exceeds 110,000. Once a Territory contains 110,000 owner-occupied households, then you will be required to sign a new Franchise Agreement for an additional Territory in order to acquire any additional owner-occupied households.

3.  Supplies Package:  $4,500

• Kitchen Solvers has identified a “Supplies Package” that you must purchase from it for use in your Business. As of the issuance date of the disclosure document, the cost of the Supplies Package is $4,500.

4.  Continuing License Fee:  you must pay Kitchen Solvers a monthly Continuing License Fee equal to the greater of: (i) the Monthly Minimum Fee, or (ii) a specified percentage of your monthly Gross Sales

Monthly Minimum Fee

• 0-6 months:  $0
• 7-12 months:  $300
• 13-24 months:  $600
• After 24 months:  $900

Royalty, as a Percentage of Monthly Gross Sales

• $0 to $50,000:  6%
• $50,001 to $75,000:  5.5%
• $75,001 to $100,000:  5%
• $100,001 to $125,000:  4.5%
• $125,001 to $175,000:  4%
• $175,001 to $225,000:  3.5%
• $225,001 to $275,000:  3%
• $275,001+:  2.5%

• Due Date:  On or before the 10th day of the month following the month for which the fee is due.

• Paid via electronic funds transfer withdrawal.

5.  Local Marketing:  $15,000 each calendar year

• Due Date:  You must spend at least $7,500 on local marketing on or before June 30 of each year, with the remainder spent on or before December 31 of each year.

6.  Technology Fee:  currently, $115 per month

• Due Date:  Monthly.

• CRM Advertising, Email, and Reporting System.

• Kitchen Solvers may increase this fee upon 30 days’ prior written notice to you.

• Four email accounts are included in the monthly fee. Additional accounts may be added for $10 per account per month.

• Kitchen Solvers also currently offers a subscription to Microsoft 365 for $8.50 per user per month.

• You begin paying the Technology Fee after the Business opens.

7.  Business Development Fee:  1% of your Gross Sales

• Due Date:  On or before the 10th day of the month following the month for which the fee is due.

8.  Transfer Fee:  $5,000

• Due Date:  At time of transfer.

9.  Pre-Opening Training:  Pre-Opening Training for up to 2 people (you and your approved manager) is included in the Initial Franchise Fee. While Kitchen Solvers currently does not do so, it may charge a fee for any additional people who attend Pre-Opening Training (currently, $150 per person).

• Due Date:  When incurred.

• You must pay all travel and living expenses while attending any training program. You will pay those charges directly to third parties.

10.  Audit:  will vary under circumstances (generally $500 to $2,000)

• Due Date:  30 days after inspection or audit.

11.  Interest Expenses; Late Fee:  interest at the highest legal rate, but not to exceed 18% per annum; $25 late fee

• Due Date:  When due.

• All amounts owed to Kitchen Solvers will bear interest at the highest legal rate for open account business credit in the state in which your Territory is located, which may not exceed 18% per annum.

• In addition to interest charges on late Continuing License Fee and Business Development Fee payments, Kitchen Solvers will require you to pay it a late fee of $25 for each delinquent report or payment that Kitchen Solvers receives 10 days after its due date.

• An additional $5 shall be added to the $25 late fee for each additional day beyond the 10-day period.

12.  Insurance:  estimated at $1,250 to $3,500 annual premium, which will vary under the circumstances

• Due Date:  When premiums are due.

13.  On-site Training Fee:  $350 per day, plus expenses

• Due Date:  When incurred.

• You may request onsite assistance from corporate staff.

14.  Annual Convention Registration Fee:  Kitchen Solvers’ then-current registration fee

• Due Date:  Upon demand.

• Kitchen Solvers currently does not charge a registration fee to attend its annual convention, but it reserves the right to do so in the future.

15.  Convention No-Show Fee:  $850 if you fail to attend Kitchen Solvers’ annual convention

• Due Date:  Upon demand.