What events trigger the Program Fee Commencement Date for a Red Wagon Club franchise?
Red_Wagon_Club Franchise · 2024 FDDAnswer from 2024 FDD Document
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| Type of Fee1 | Amount | Due Date | Remarks |
|---|---|---|---|
| Program Fee | $2,500 from the Program Fee Commencement Date through the 3rd calendar month thereafter; th th $5,000 for the 4 – 6 months following the Program Fee Commencement Date; th and $7,500 for the 7 each month following the Program Fee Commencement Date | Monthly, the 10th of each month | Your obligation to pay the Program Fee begins on the first of the calendar month immediately following the earlier of (i) the date you commence operations of your RWC Business, or (ii) the 180 days after the effective date of the Franchise Agreement (the "Pro |
Source: Item 6 — OTHER FEES (FDD pages 13–17)
What This Means (2024 FDD)
According to Red Wagon Club's 2024 Franchise Disclosure Document, the Program Fee Commencement Date is triggered by the earlier of two events. The first trigger is the date the franchisee commences operations of their Red Wagon Club Business. The second trigger is 180 days after the effective date of the Franchise Agreement.
This means that a new Red Wagon Club franchisee will be required to start paying the Program Fee even if they have not yet opened their business, but no sooner than 180 days after signing the Franchise Agreement. This is a critical consideration for prospective franchisees as it impacts their initial financial obligations.
The Program Fee itself starts at $2,500 per month for the first three months after the Program Fee Commencement Date. It then increases to $5,000 per month for the subsequent three months (months 4-6), and further increases to $7,500 per month for each month thereafter. Franchisees need to be aware of this escalating fee structure and plan their business launch accordingly to minimize expenses before revenue generation.