Detailed Information on Tutoring Club’s Initial Franchise Fee, Royalty Fee + 21 Other Fees (Items 5 and 6, 2021 FDD)
1. Initial Franchise Fee: $34,500
- You must pay Tutoring Club an initial franchise fee of $34,500 in a lump sum when you sign the Franchise Agreement.
- If you are an honorably discharged veteran of the United States Armed Forces, Tutoring Club will discount its initial franchise fee for your first location by 20%.
- Tutoring Club may agree to finance a portion of this amount.
2. Supply and Software License Fees: $500 to $2,000
- You must purchase from Tutoring Club an initial start-up package of items for each Tutoring Center you purchase, at the time that you sign an individual Franchise Agreement for that Tutoring Center (the “Start-Up Package”).
- The cost of the Start-Up Package is $15,000, plus an additional cost for shipping between $500 and $2,000, and includes tables, chairs, office desk, interior signage, bookshelves, and educational materials.
- You also must pay Tutoring Club your first month’s license fee of $110 for the proprietary Tutoring Club Software and thereafter you will pay Tutoring Club’s then-current monthly license fees, currently $110, for the term of your Franchise Agreement.
- All of the fees for the Start-Up Package and the license fees for the proprietary Tutoring Club Software are payable to Tutoring Club or its affiliates.
- Tutoring Club may agree to finance a portion of this amount.
3. Training Fees: $300 per person
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- If you wish to bring more than 2 people to Tutoring Club’s initial training program, you must pay a fee of $300 per person, per day of training. You must also pay for the travel, meal, lodging, and incidental expenses for each person who attends training (including yourself, if applicable).
4. Royalty Fee: 10% of Gross Revenue
- Due Date: Payable monthly by the 10th day of each month.
- Royalty Fees are calculated based on Gross Revenue for the previous calendar month.
- Tutoring Club reserves the right to withdraw amounts due by Electronic Funds Transfer (“EFT”) from your designated bank account.
5. Brand Fund: Tutoring Club’s fee, as published in the Operations Manual, up to 5% of Gross Revenue; Tutoring Club’s current Brand Fund is 1% of your Gross Revenue
- Due Date: Payable monthly and in the same manner as Royalty Fees.
- You must contribute to the Brand Fund each month to support Tutoring Club’s advertising efforts for the System.
6. Tutoring Club Software License Fee: $110 per month
- Due Date: Payable monthly and in the same manner as Royalty Fees.
- You are required to lease from Tutoring Club the right to use the Tutoring Club Software.
- Tutoring Club has the right to increase this fee from time-to-time.
7. Audit Costs: cost of audit, plus expenses
- Due Date: Upon receipt of invoice.
- Payable if the audit shows an underpayment of fees of at least 3% in any month, or if you fail to cooperate with Tutoring Club’s audit.
8. Inspection Fee: current rates as published in the Operations Manual, plus expenses
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- Payable if you are unable to give Tutoring Club adequate assurance of your compliance with System standards and, as a result, Tutoring Club must inspect your Tutoring Center.
9. Relocation Fee: Tutoring Club’s charges and expenses relating to your relocation, including legal and accounting
- Due Date: Upon relocation.
- You pay for Tutoring Club’s expenses in considering any request for relocation.
10. Operation of the Franchised Business in Case of Your Default, Incapacity, or Death: current rates as published in the Operations Manual; currently, $300 per person per day, plus expenses
- Due Date: Monthly after time of service and at the same time as Royalty Fees.
- Tutoring Club may operate Franchised Business if you fail to cure certain defaults within the applicable cure period, or if you die or become incapacitated and leave your Franchised Business without an operator.
11. Late Fees: $100, plus 1.5% per month (or highest legal rate)
- Due Date: After due date.
- Payable only if you fail to pay Tutoring Club on time for any amounts owed.
12. Dishonored Payment Fee: $100
- Due Date: After due date.
- Payable only if any payment you make to Tutoring Club is not honored by your financial institution.
13. Insurance Policies: amount of unpaid premiums, plus an administrative fee equal to 20% of the cost of such premiums
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Colin started as a team member at 21 and now owns 6 locations in Tampa Bay. Lisa came from marketing and built 21 in San Diego. The most successful multi-unit owners move early and secure markets with room to grow. Use our free tool to search multiple ZIP codes and find franchises where you can still stack locations, before someone else does.- Due Date: Upon receipt of invoice.
- Payable only if you fail to maintain required insurance coverage and Tutoring Club elects to obtain coverage for you.
- You must have the policies at the earlier of: (a) 90 days after signing the Franchise Agreement; or (b) before you acquire an interest in the real property on which you will operate your Tutoring Center.
14. Transfer Fee (Unit Franchise): 50% of the then-current franchise fee for a startup franchise at the time of the transfer
- Due Date: At the time of transfer.
- This transfer fee will not apply if you are an individual transferring to a new legal entity wholly owned by you.
15. Additional Training: current rates as published in the Operations Manual; currently, $300 per day, plus expenses
- Due Date: Time of service.
- Tutoring Club provides initial training at its headquarters for you and your initial Director. You must pay for any additional training or trainees.
16. Site Evaluation Assistance: current rates as published in the Operations Manual; currently, $300 per day, plus expenses
- Due Date: Time of service.
- At your request, Tutoring Club will provide onsite assistance in evaluating proposed sites for your Tutoring Center.
17. Additional Assistance: current rates as published in Operations Manual; currently, $300 per day per person, plus expenses
- Due Date: Time of assistance.
- Tutoring Club provides 1 day of assistance to you within about 2 months after you begin operations, at no cost to you. You will pay for any additional assistance from Tutoring Club if you request it.
18. Other Training: you are required to pay your expenses as well as your employees’ expenses in attending these programs. You must also pay $300 for any additional employees you elect to have undergo training that are not attending the same initial training as you and your initial Director.
- Due Date: Time of program.
- Attendance will not be required more than 4 days each year.
19. National Conference Non-Attendance Fee: $1,000
- Due Date: Upon receipt of invoice.
- Payable if you do not receive prior written authorization by Tutoring Club, excusing your presence at the annual conference based on extenuating factors (i.e. medical emergency or death in the family).
20. Cost of Enforcement or Defense: all costs, including attorneys’ fees
- Due Date: Upon settlement or conclusion of claim or action.
- You must reimburse Tutoring Club for all of the costs it incurs in enforcing its obligations under the Franchise Agreement if it prevails.
21. Indemnification: all costs, including attorneys’ fees
- Due Date: Upon settlement or conclusion of claim or action.
- You must defend suits at your own cost and hold Tutoring Club harmless against suits involving damages resulting from your operation of the Franchised Business.
22. Pre-Payments: all funds taken from customers for services that have not yet been fully delivered as of the date of termination and/or expiration of the Franchise Agreement
- Due Date: Upon expiration or termination of the Franchise Agreement.
- You must either refund all prepayments, or, in Tutoring Club’s discretion, pay such pre-payments to Tutoring Club or its designee, upon the expiration or termination of the Franchise Agreement.
23. Liquidated Damages: the combined monthly average of Royalty Fees you pay Tutoring Club from the date you begin operating your Franchised Business through the date of early termination, multiplied by the greater of: (i) 24 months, or (ii) the number of full months remaining in the Term
- Due Date: Within 10 days of the early termination of your franchise.
- Due only if Tutoring Club terminates the Franchise Agreement before the end of the term because of your material breach.
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