Detailed Information on Style Encore’s Initial Franchise Fee, Royalty Fee + 15 Other Fees (Items 5 and 6, 2026 FDD)
- You must pay to Style Encore “Initial Fees” to cover the cost of goods and services that it provides to you before your Store opens. The Initial Fees include the Initial Franchise Fee and the initial cost of Style Encore’s point-of-sale system and proprietary software.
- Each component of the Initial Fees is described below:
1. Initial Franchise Fee: $15,000 to $25,000
- If you are opening a single Store, you must pay an “Initial Franchise Fee” of $25,000 to Style Encore. The Initial Franchise Fee is $15,000 if you are currently opening a second or subsequent Store or if you are an existing franchisee of one of the franchisor’s other franchised concepts.
- You must sign a separate Franchise Agreement for each Store. You must pay the Initial Franchise Fee for your first Store in a lump sum to Style Encore when you sign the Franchise Agreement. The Initial Franchise Fee is nonrefundable.
2. Point-of-Sale (POS) System: $23,200 to $30,900
- You must use in your Store the point-of-sale system (the “POS System”) which Style Encore has selected for your Business System, and you must enter into a Software License Agreement with Style Encore for use of its proprietary software program (the “Proprietary Software”).
- The initial cost of the POS System and Proprietary Software payable to Style Encore will range from $23,200 to $30,900 for each Store. This amount is not refundable.
- You will generally purchase the POS System and Proprietary Software four weeks prior to the open to buy period.
3. Continuing Fee: 5% of your “Gross Sales”
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- “Gross Sales” means the total revenues you receive from the sale of goods and services, whether by cash or by check, credit card or trade, in connection with the Store, less customer refunds and returns. Gross Sales includes any sales permitted though the Internet.
- Gross Sales do not include wholesale transactions from Style Encore franchisees to other Style Encore franchisees in good standing with the franchisor. Gross Sales will not include sales tax collected from customers and actually paid to appropriate tax authorities.
- In certain situations, other franchisees may be paying a lower percentage rate for continuing fees than you are. All new franchisees are required to pay the percentage rate stated in the disclosure document. However, a franchisee with an earlier Franchise Agreement may have been required to pay a lower percentage rate than the stated amount or may be required to pay less upon renewal of their Franchise Agreement.
- In the future, Style Encore may change the continuing fees for new and renewing franchisees unless your Franchise Agreement specifically grants you the right to renew your Franchise Agreement at a lower rate.
- Style Encore requires you to allow it to withdraw continuing and other fees directly from your bank account.
4. Marketing Fee: $1,500 per year
- Due Date: Due January 1 of each year.
- Your initial payment will be prorated based on the effective date of your Franchise Agreement and invoiced immediately.
- Style Encore may, with a minimum of 60 days’ prior written notice, increase the yearly Marketing Fee. Said fee will not increase more than $1,000 during the term of the Franchise Agreement.
5. Cooperative Advertising: maximum amount is 5% of your Gross Sales
- Due Date: Established by the franchisor or franchisees.
- The franchisor or local Style Encore franchisees may establish an advertising cooperative in your area. The local advertising cooperative will establish the amount of cooperative advertising fees; however, your required contribution will not be less than 0.5% of Gross Sales, regardless of any vote or by-law of the cooperative.
- If a company-owned store is a member of your cooperative, it will have voting power equal to that of franchised stores. Company-owned stores will not have controlling voting power in any local cooperative.
- There are currently no company-owned Style Encore stores.
6. Local Marketing Expenses: minimum amount, when combined with cooperative advertising expenses, is 5% of your Gross Sales
- Due Date: Minimum amount must be spent during each calendar year.
- To the extent your annual contributions to cooperative advertising programs are less than 5% of the Gross Sales for your Store, you must conduct additional advertising and marketing activities in your local geographic area.
- Your local advertising activities, however, will not eliminate your obligations to contribute to cooperative advertising programs.
- If you do not spend at least 5% of Gross Sales for the calendar year for the placement of cooperative or local advertising, Style Encore may require that you pay it the difference between what you should have spent for advertising during the calendar year and what you actually spent, with the money to be spent on advertising initiatives in your market in the subsequent year at Style Encore’s discretion.
7. North American Ad Fund: If Style Encore imposes this Ad Fund, you will pay up to 3% of your Gross Sales.
- Due Date: If Style Encore imposes this Ad Fund, it will be due on or before Wednesday of each week for the previous week.
- Style Encore may, with 60 days’ notice, increase your minimum advertising expenditures up to a total of 6% of your Store’s Gross Sales. Of the 6%, up to one-half (or 3% of Gross Sales) will be paid in the form of an “Advertising Fee” to Style Encore for deposit in an “Ad Fund” to be managed by the franchisor. The balance of the 6% minimum advertising requirement must be used for cooperative advertising and local advertising.
8. Transfer Fee: $10,000
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- This fee is payable when the Franchise Agreement or a substantial portion of the assets of the Store or any controlling interest in the franchisee is transferred.
9. Audit Expenses: cost and expenses related to audit
- Due Date: After inspection or audit.
- Payable only if understatement is greater than 2%.
10. Renewal Fee: $10,000
- Due Date: 30 days before renewal of Franchise Agreement.
11. Software Fee: $295 per month (plus applicable taxes)
- Due Date: First day of each month.
- This fee is for services, including maintenance and repair services, as well as for any updates, modifications, and enhancements to the Software which Style Encore elects to release.
12. Technology Fee: currently, $0
- Due Date: Periodically, if established.
13. Remodeling Expenses: will vary under circumstances
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- You must modernize your Store upon notice from Style Encore, although it cannot require you to do so more than once every 5 years. The modernization must conform to the standards that Style Encore requires at that time for similarly situated new Style Encore Stores.
- The scope of modernization may range from simply repainting the Store to completely refurbishing the entire Store, including replacement of fixtures, exterior signage, sign supplies, equipment, and POS System.
- Style Encore cannot estimate the current costs for a modernization project because the scope and extent of the modernization will vary based on the then-current brand standards, the condition of the Store, and the cost of labor and materials at that time.
- You may make these payments in whole or in part to Style Encore’s approved third parties and/or preferred vendors. Before you modernize your Store, you must submit your modernization plans to Style Encore for its approval.
14. Insurance: will vary under certain circumstances
- Due Date: When Style Encore requests reimbursement.
- Payable to Style Encore if you fail to pay insurance premium and Style Encore pays it for you.
15. Inventory: will vary under circumstances
- Due Date: When incurred
- You will need to replenish your Store inventory (both new and used items) regularly. Your quarterly costs for inventory will vary significantly, depending on such factors as seasonal changes in demand and your Store sales, although these costs generally range from $65,000 to $80,000.
16. Interest Expenses: lesser of 18% per year or maximum rate permitted by law
- Due Date: When due.
- Payable if Continuing Fee or other amounts due Style Encore are not timely paid.
17. Costs and Attorneys’ Fees: will vary under circumstances
- Due Date: When incurred.
- Style Encore may recover costs and reasonable attorneys’ fees if you lose in a dispute with it.
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