What does the Technology Fee for Extreme Art Studio cover?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
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
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 a monthly Technology Fee. For the initial Extreme Art Studio Business, this fee is currently $400 per month, while each additional Extreme Art Studio Business under a Standard Franchise incurs a $300 per month fee. This Technology Fee covers the use of Extreme Art Studio's online systems, website, applications, email, data sharing, integration and maintenance of DB Software, learning management software, search engine optimization for lead generation, and other Internet-related functions.
Extreme Art Studio retains the right to modify the Technology Fee under certain conditions. The franchise agreement states that franchisees are responsible for any fee increases resulting from upgrades, modifications, or additional systems or software, as well as increases in fees from third-party vendors. Extreme Art Studio also reserves the right to change or add approved suppliers or vendors of these services at any time, at their sole discretion.
Furthermore, Extreme Art Studio can enter into master license agreements with software or technology suppliers and sublicense the software or technology to franchisees, charging franchisees for all amounts that Extreme Art Studio must pay to the licensor based on the franchisee's use of the software or technology. They can also create proprietary software or technology that franchisees must use, requiring franchisees to enter into a license agreement and pay reasonable initial and ongoing licensing, support, and maintenance fees. Extreme Art Studio can increase or decrease the Technology Fee and other technology and licensing expenses at any time, provided they give 30 days' written notice.
In addition to the Technology Fee, franchisees must 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 of operating the Extreme Art Studio Business. This fee is subject to recalculation by a third-party vendor beginning on the second calendar year, based on the volume of the previous calendar year. Franchisees also pay a DB Software Fee, currently between $225-$300 per month. The Technology Fee is due the first day of the month beginning the second month after signing the Franchise Agreement, while the CR Software Fee and DB Software Fee are due on the first day of the month after signing the Franchise Agreement.