How does Benjamin Franklin Plumbing calculate the franchise fee?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
of the expenses in the table are refundable, except possibly certain deposits and pre-paid expenses paid to third parties.
- (2) Calculation of the Franchise Fee is discussed in detail in Item 5. Under the terms of the Conversion Incentive Program, (i) you are required to pay $5,000 of the Franchise Fee and any applicable Additional Population Fee in a lump sum at the time of signing the Franchise Agreement, (ii) the remainder of the Franchise Fee and any applicable Population Fee is deferred for a period of five years under the terms of a Promissory Note that you will sign with us, and (iii) you may be eligible for forgiveness of the remainder of Franchise Fee and any applicable Additional Population Fee up to 100%. In the event you are required to pay the entirety of the Franchise Fee, the low end of the range in the table will be $43,000 assuming you license a single Territory with a population of 100,000 and no Franchise Fee discounts apply, and the high end of the range will be $103,200 assuming you license three Territories with a population of 100,000 and no Franchise Fee discounts apply other than the 30% discount for additional Territories granted for an existing franchisee.
- (3) As described in Item 6, you are required to conduct initial local marketing as part of your pre-opening/grand opening of your Franchised Business. The low end of the range assumes you will conduct all of your Grand Opening Marketing after you open your Franchised Business. The high end of the range assumes that you will spend $6,000 prior to opening your Franchised Business.
- (4) The estimate is for a location with approximately 2,000 to 3,000 rentable square feet. The cost per square foot of commercial space varies considerably depending on the location, type of property, and market conditions affecting commercial property. The estimate in the table includes three months of rent; however, your landlord may also require you to provide a security deposit of one month's or two months' rent. This cost may not apply if you already lease a space which meets our standards for Franchised Businesses.
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 28–37)
What This Means (2025 FDD)
According to Benjamin Franklin Plumbing's 2025 Franchise Disclosure Document, the calculation of the franchise fee is detailed in Item 5. For a Conversion Franchise, the franchisee is required to pay $5,000 of the Franchise Fee and any applicable Additional Population Fee in a lump sum when signing the Franchise Agreement. The remainder of the Franchise Fee and any applicable Population Fee is deferred for five years under a Promissory Note.
The document states that franchisees may be eligible for forgiveness of up to 100% of the remaining Franchise Fee and any Additional Population Fee. However, if the franchisee is required to pay the entire Franchise Fee, the low end of the estimated initial investment will be $43,000, assuming a single territory with a population of 100,000 and no franchise fee discounts. The high end will be $103,200, assuming three territories with a population of 100,000 and a 30% discount for additional territories granted to an existing franchisee.
For a Start-Up Franchise, the table in Item 7 assumes licensing a single territory with a population of 100,000 and no franchise fee discounts. If a franchisee licenses a territory with a population greater than 100,000 or licenses more than one territory, they will incur greater pre-opening expenses due to the additional franchise fees and expenses involved in servicing a larger population, which may include expenses for additional employees, equipment, and vehicles.
The initial franchise fee for both a start-up and conversion franchise is $5,000, payable upon signing the franchise agreement. The method of payment can be either a lump sum or financed. The total estimated initial investment for a start-up franchise ranges from $84,570 to $204,824, while for a conversion franchise, it ranges from $42,570 to $148,824. These figures include the initial franchise fee payment.