What were the OSP fees for Cost Cutters Family Hair Salon?
Cost_Cutters_Family_Hair_Salon Franchise · 2024 FDDAnswer from 2024 FDD Document
calls. The Initial Fee will not be refunded if FRANCHISEE or its District Manager
fails to complete the COST CUTTERS training program. The FRANCHISEE will be notified by COST CUTTERS in writing if either this Agreement or the FRANCHISEE is rejected by COST CUTTERS pursuant to Article 4.2. Except as specifically set forth in this Article 4.3, the Initial Fee payable by the FRANCHISEE pursuant to Article 4.1 will not be refundable to the FRANCHISEE.
ARTICLE 5 CONTINUING FEES
- 5.1 CONTINUING FEES. In addition to the Initial Franchise Fee, the FRANCHISEE will, for the entire term of this Agreement, pay COST CUTTERS weekly Continuing Fees equal to a percentage of the FRANCHISEE'S weekly Gross Revenues, as defined herein, which are received, billed or generated by, as a result of or from the FRANCHISEE'S Cost Cutters Business. Unless the Cost Cutters Business hereunder was formerly a company-owned Cost Cutters store or affiliated branded salon that was acquired by FRANCHISEE from COST CUTTERS or its affiliate to be operated as FRANCHISEE's Cost Cutters Business under this Agreement for the first (1st) through the fifty-second (52nd) weeks of the FRANCHISEE'S operation of its Cost Cutters Business pursuant to this Agreement, the FRANCHISEE will pay COST CUTTERS a weekly Continuing Fee equal to four percent (4%) of the FRANCHISEE'S Gross Revenues. For the fifty-third (53rd) and each subsequent week of the FRANCHISEE'S operation of its Cost Cutters Business for the balance of the remaining term of this Agreement, the FRANCHISEE will pay COST CUTTERS a weekly Continuing Fee of six percent (6%) of the FRANCHISEE'S Gross Revenues and One Hundred Dollars ($100) per week. If FRANCHISEE's Cost Cutters Business hereunder was formerly a company-owned Cost Cutters store or affiliated branded salon that was acquired by FRANCHISEE from COST CUTTERS or its affiliate to be operated as FRANCHISEE's Cost Cutters Business under this Agreement, then the weekly Continuing Fees will be the greater of six percent (6%) of FRANCHISEE's weekly Gross Revenues and One Hundred Dollars ($100) p
Source: Item 23 — RECEIPT (FDD pages 76–439)
What This Means (2024 FDD)
Based on the 2024 Franchise Disclosure Document, Cost Cutters Family Hair Salon franchisees are required to pay continuing fees throughout the entire term of the agreement. These fees are calculated weekly as a percentage of the franchisee's gross revenues. For the first 52 weeks of operation, the weekly continuing fee is 4% of gross revenues, unless the location was previously a company-owned store or affiliated branded salon acquired from Cost Cutters or its affiliate.
After the initial 52 weeks, the weekly continuing fee increases to 6% of the franchisee's gross revenues, plus an additional $100 per week. If the Cost Cutters Family Hair Salon location was formerly a company-owned store or affiliated branded salon acquired from Cost Cutters or its affiliate, the weekly continuing fees are the greater of 6% of the franchisee's weekly gross revenues or $100 per week for the entire term of the agreement.
These continuing fees are not refundable under any circumstances and must be paid weekly. Failure to pay the weekly continuing fees constitutes a material breach of the franchise agreement. These fees compensate Cost Cutters Family Hair Salon for the ongoing use of its business system, trademarks, and the support provided to franchisees.