Does the Red Wagon Club have the discretion to increase the technology fee?
Red_Wagon_Club Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee1 | Amount | Due Date | Remarks |
|---|---|---|---|
| Technology Fee | Not currently assessed | If assessed, monthly, the 10th of each month | We do not currently charge this fee but may do so for technology that we or our affiliates develop or license to you and for other maintenance, support, and technology development services that we or our affiliates provide. The amount of this fee is subject to increase at our discretion commensurate with the technology used in the operation of RWC Businesses; provided, that we will not increase this fee by more than $500 in any given month of the term of a Franchise Agreement. We anticipate that you would pay these amounts directly to designated third-party vendors, but we may require you to pay us the Technology Fee directly. |
Source: Item 6 — OTHER FEES (FDD pages 13–17)
What This Means (2024 FDD)
According to Red Wagon Club's 2024 Franchise Disclosure Document, while a technology fee is not currently assessed, Red Wagon Club retains the right to implement one in the future. This fee would cover technology that Red Wagon Club or its affiliates develop or license to franchisees, as well as maintenance, support, and technology development services.
Red Wagon Club has the discretion to increase the technology fee, but with limitations. Any increase must be commensurate with the technology used in the operation of Red Wagon Club businesses. Furthermore, the FDD stipulates that Red Wagon Club will not increase this fee by more than $500 in any given month during the term of the Franchise Agreement.
Prospective franchisees should note that while the technology fee is not currently charged, its potential implementation and the possibility of increases could impact their operating costs. It is important to factor this potential expense into financial projections and to discuss with Red Wagon Club what specific technologies might trigger the fee and how it will be assessed. The FDD also indicates that franchisees may pay these amounts directly to third-party vendors or to Red Wagon Club directly.