What sections of the Face Foundrie Franchise Agreement address the fees franchisees must pay?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
- 6. FEES AND OTHER PAYMENTS.
6.01 Initial Franchise Fee. Upon the execution of this Agreement, Franchisee shall pay to Franchisor an initial franchise fee in an amount set forth on Exhibit A (the "Initial Franchise Fee"). Franchisee acknowledges and agrees that the Initial Franchise Fee is paid as consideration for Franchisor granting Franchisee the right to develop, open and operate the Facial Bar using the Marks and the System, that the Initial Franchise Fee is fully earned by Franchisor at the time this Agreement is executed, and that the Initial Franchise Fee shall not be refundable for any reason.
6.02 Royalty Fee and Minimum Royalty Fee.
- (a) In addition to all other amounts required to be paid hereunder, during the term hereof, Franchisee agrees to pay Franchisor a continuing royalty fee (the "Royalty Fee") equal to the greater of: (i) seven percent (7%) of Gross Sales per month and (ii) the applicable Minimum Royalty Fee. Payment of the Royalty Fee shall be made no later than the 5th day of each month for Gross Sales from the prior month during the term of this Agreement.
- (b) The "Minimum Royalty Fee" applicable to the Facial Bar is an amount of One Thousand Five Hundred Dollars ($1,500) per month. The Minimum Royalty Fee will be assessed beginning on the first day of the month following the earlier of: (a) the date the Facial Bar opens, and (b) the date that is ten (10) months after the date of this Agreement, subject to any extensions to the required opening date that have been granted to Franchisee pursuant to Section 3.03. Fra
6.03 Other Fees.
- (a) Marketing Contributions. During the Term of this Agreement, Franchisee will pay Franchisor a monthly Marketing Contribution in an amount equal to three percent (3%) of Gross Sales, as further described in Section 10.02. Payment of the Marketing Contribution shall be made at the same time as the Royalty Fee.
- (b) Technology Fee. Beginning on the date that the Facial Bar opens, Franchisee will pay Franchisor (or its designee) its then-current monthly Technology Fee for email hosting, website maintenance, and for such other technology as Franchisor may designate or license for Franchisee's use at the Facial Bar. This Technology Fee may change from time to time. If Franchisor does not directly provide these services, you will be required to sign a separate agreement with Franchisor's designated provider of these services (which
may be an affiliate of Franchisor). Payment of the Technology Fee shall be made at the same time as the Royalty Fee.
(c) Default Fees.
- a.
Standard Default Fee.
In addition to Franchisor's other rights under the law and this Agreement, if Franchisee breaches or defaults on certain provisions of this Agreement that is not otherwise addressed by another fee in this section, and Franchisee fails to cure the breach or default during the cure period, Franchisee will immediately on notice from Franchisor pay to Franchisor a fee of Five Hundred Dollars ($500) per default per cure period that passes until the breach or default is cured to offset Franchisor's costs incurred in addressing the default.
Breaches and defaults subjecting Franchisee to this "Standard Default Fee" are material breaches and defaults of this Agreement and include, but are not limited to, those breaches and defaults outlined in this Agreement's Section 14.03.
Franchisee must pay the Standard Default Fee immediately upon notice from Franchisor.
- b.
Prohibited Product, Service or Supplier Fee.
Franchisee must pay the Standard Default Fee immediately upon notice from Franchisor.
- b.
Prohibited Product, Service or Supplier Fee.
In addition to Franchisor's other rights under the law and this Agreement, in the event Franchisee uses any supplier not approved by Franchisor, or offers any unapproved product or service in connection with the Facial Bar in violation of this Agreement, Franchisor reserves the right to charge Franchisee a fee of Five Hundred Dollars ($500) per day of use of the unauthorized supplier, products or services immediately upon notice from Franchisor.
- c.
Unauthorized Advertising Fee.
In addition to Franchisor's other rights under the law and this Agreement, in the event Franchisee uses any advertising or promotional materials not approved by Franchisor in violation of this Agreement, Franchisor reserves the right to charge Franchisee a fee of Five Hundred Dollars ($500) per day of use of unauthorized advertising or promotional materials.
- d.
Insurance Handling Fee.
In addition to Franchisor's other rights under the law and this Agreement, in the event Franchisee fails to obtain or maintain insurance coverage required under this Agreement and Franchisor obtains the insurance coverage on Franchisee's behalf, Franchisor reserves the right to charge Franchisee its thencurrent insurance handling fee, which is in addition to the cost of insurance premiums, for which Franchisee must also reimburse Franchisor.
- (d) Accounting System Set-Up Fee.
Franchisee will pay Franchisor a one-time "Accounting System Set-up Fee," at its then-current rate, for the setup of an approved accounting system with an approved chart of accounts and products and services.
- 6.04 Automated Bank Draft. All Royalty Fees, Marketing Contributions, Technology Fees, and other fees or contributions required to be paid to Franchisor or its Affiliates shall be paid by automated bank draft or such other method as determined by Franchisor, as applicable, in its sole discretion.
Any approved relocation of the Facial Bar shall be at Franchisee's sole cost and expense, and Franchisor shall have the right to charge Franchisee a relocation fee equal to One Thousand Dollars ($1,000) plus any expenses Franchisor incurs in facilitating the relocation.
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 31–32)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, several sections within the Franchise Agreement outline the fees a franchisee must pay. Section 6 covers fees and other payments, including the initial franchise fee, royalty fee, and minimum royalty fee. The initial franchise fee is specified in section 6.01 and is due upon signing the agreement. The royalty fee and minimum royalty fee are detailed in section 6.02, with the royalty fee being the greater of 7% of gross sales per month or a minimum of $1,500 per month.
Section 6.03 outlines other fees such as marketing contributions, technology fees, and default fees. The marketing contribution is 3% of gross sales, as described further in Section 10.02, and the technology fee covers email hosting and website maintenance. Default fees include a standard default fee of $500 per default per cure period, a prohibited product, service, or supplier fee of $500 per day, an unauthorized advertising fee of $500 per day, and an insurance handling fee.
Section 6.04 states that all royalty fees, marketing contributions, technology fees, and other fees must be paid via automated bank draft. Additionally, there is an accounting system set-up fee for setting up an approved accounting system. Finally, Section 2.01 mentions a relocation fee of $1,000 plus expenses if the franchisee relocates the Facial Bar. Franchisees should carefully review these sections to understand all potential fees associated with operating a Face Foundrie franchise.