What is the annual cost of the required Toast subscriptions for a Chop5 Salad Kitchen franchise?
Chop5_Salad_Kitchen Franchise · 2024 FDDAnswer from 2024 FDD Document
s, software training fees, data migration fees, etc.) will range from $2,300 to $3,600.
Toast provides a 2-year warranty on all hardware other than Toast Go 2 Pay terminals, which have a 1-year warranty. You must pay Toast an ongoing fee of $390 per month ($4,680 per year) for the required subscriptions. The required and optional subscriptions for Toast are set forth below:
| | Time Period (measured from opening date) | Current Amount | Maximum Amount* | |---|---|---|---| | 0 through 12th month | | 0.5% of Gross Sales | 4.5% of Gross Sales | | 13th month through 24th month | | 1% of Gross Sales | 5% of Gross Sales | | 25th month through remainder of term | | 1.5% of Gross Sales | 5.5% of Gross Sales | * You are required to have text marketing capabilities. If you decide not to purchase the marketing subscription from Toast, you must purchase text marketing capabilities from another source. Our 3 company-owned Restaurants use Simple Texting, which costs us approximately $899 per month on an aggregate basis ($10,788 per year) plus $0.02 per message. Pricing varies depending on the plan selected and number of text messages purchased.
As part of the monthly fee, Toast will provide all required maintenance and updates for your POS system software. Any upgrades will be billed at Toast's then-current rates. You have the option to purchase additional features for your POS system at an additional cost.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 24–36)
What This Means (2024 FDD)
According to Chop5 Salad Kitchen's 2024 Franchise Disclosure Document, franchisees must pay an ongoing fee of $390 per month for required Toast subscriptions, which totals $4,680 annually. This covers the necessary software and services provided by Toast for the point-of-sale (POS) system. Toast also provides a 2-year warranty on most hardware, excluding Toast Go 2 Pay terminals, which have a 1-year warranty.
In addition to the basic software subscription, Chop5 Salad Kitchen franchisees must purchase subscriptions from Toast for Enterprise Data Management, Gift Card Program, Loyalty Program, Online Ordering, Toast Takeout, and Kitchen Display. While the $4,680 annual fee covers the required subscriptions, franchisees should budget for potential additional costs. Toast's fees are subject to change, and upgrades to the POS system will be billed at Toast's then-current rates. Franchisees also have the option to purchase additional features for the POS system at an additional cost.
Furthermore, franchisees are required to have text marketing capabilities. If they opt not to purchase the marketing subscription from Toast, they must acquire text marketing capabilities from another source. Chop5 Salad Kitchen's company-owned restaurants use Simple Texting, which costs approximately $10,788 per year plus $0.02 per message on an aggregate basis. This provides an example of an alternative cost if a franchisee chooses not to use Toast for text marketing. The FDD specifies that Toast will serve as the credit card processing company and charge its then-current credit card processing rates, which franchisees should factor into their financial planning.