Does the Extreme Art Studio Franchise Agreement outline any 'TECHNOLOGY FEES'?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
the same manner as the Royalty. If you use marketing materials that we have not approved in accordance with Section 9.2.3, we may charge you a fee of $500 per occurrence.
- 3.4 TECHNOLOGY FEES. You agree to pay us or our affiliate the then-current monthly technology fee ("Technology Fee"), currently $400 per month for your initial Extreme Art Studio Business and $300 per month for each additional Extreme Art Studio Business under a Standard Franchise, for use of our online systems, website, applications, email, data sharing, integration and maintenance of DB Software (as defined in Section 3.6), learning management software, search engine optimization for lead generation, and other Internet-related functions. You will be responsible for any increase in fees that result from any upgrades, modifications or additional systems or software and for any increases in fees from thirdparty vendors. We reserve the right to: (i) change or add approved suppliers or vendors of these services at any time, in our sole discretion; (ii) enter into a master license agreement with any software or technology supplier and sublicense the software or technology to you, in which case we may charge you for all amounts that we must pay to the licensor based on your use of the software or technology; (iii) create proprietary software or technology that must be used by Extreme Art Studio franchisees, in which case we may require that you enter into a license agreement with us and pay us reasonable initial and ongoing licensing, support and maintenance fees; and (iv) increase or decrease the technology fee and other technology and licensing and expenses that you are required to pay under this Franchise Agreement at any time, upon 30 days' written notice to you. You also agree to pay our designated vendor the then-current "CR Software Fee"(currently a monthly fee of $35 plus 1% of Gross Sales for the first calendar year of operating your Extreme Art Studio Business, and then subject to recalculation by our third-party vendor beginning on the second calendar year Based on the volume of the previous calendar year. You also agree to pay our designated vendor the then
current "DB Software Fee" (currently $225-$300 per month). The Technology Fee is due the first day of the month beginning the second month after signing this Franchise Agreement and within five days of the end of the calendar month. The CR Software Fee and DB Software Fee are currently due and payable on the first day of the month after signing this Franchise Agreement, and monthly thereafter within five days of the end of the calendar month.
- 3.5 OPENING EXTENSION FEE. If you fail to begin operations from your Approved Location within 12 months after signing this Franchise Agreement (or 12 months after signing the Extreme Art Rider for subsequent Extreme Art Studio Business(es)) if you agreed to operate Extreme Art Studio Business, you will pay us $1,000 per month ("Opening Extension Fee"), until either the applicable Extreme Art Studio Business is open or we terminate this Franchise Agreement.
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio Franchise Disclosure Document, franchisees must pay several technology-related fees. First, there is a monthly Technology Fee, which is currently $400 for the initial Extreme Art Studio Business and $300 per month for each additional location under a Standard Franchise. This fee covers the use of Extreme Art Studio's online systems, website, applications, email, data sharing, DB Software maintenance, learning management software, and search engine optimization.
In addition to the Technology Fee, franchisees also pay a CR Software Fee to a designated vendor, which is currently $35 per month plus 1% of Gross Sales for the first calendar year. This fee is then subject to recalculation by a third-party vendor beginning in the second year, based on the previous year's sales volume. Franchisees also pay a DB Software Fee, ranging from $225 to $300 per month, to a designated vendor. The Technology Fee is due starting the second month after signing the Franchise Agreement, while the CR Software Fee and DB Software Fee are due the month after signing.
Extreme Art Studio retains the right to modify these technology requirements and fees. They can change or add approved suppliers, enter into master license agreements and sublicense software to franchisees (charging franchisees the associated costs), create proprietary software requiring franchisees to enter into license agreements and pay associated fees, and increase or decrease the Technology Fee with 30 days' written notice. Furthermore, if a franchisee opts to add modules of additional services such as Craft Academy, Kidscientific, and Little Hands Discovery, they will incur an additional monthly Module Technology Fee of $250.