To whom would a Red Wagon Club franchisee pay the Technology Fee?
Red_Wagon_Club Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee1 | Amount | Due Date | Remarks |
|---|---|---|---|
| Transfer Fee | 75% of then-current Initial Franchise Fee | At time of transfer | Applies to a transfer of your RWC Business' ownership, possession, or control, or substantially all of its assets. This fee covers our assessment of transferee's qualifications, training, and early support. See Item 17. If shares are being transferred between existing owners, or if a new shareholder is being added that does not change the majority ownership of you, the transfer fee is $1,500. For transfers to existing franchisees, the transfer fee is 33% of the then-current Initial Franchise Fee. |
| Successor Franchise Fee | $2,500 | At time of election of Successor Franchise | This fee covers the administrative costs of granting you a Successor Franchise to govern the operation of your RWC Business for an additional term. See Item 17. |
| 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 |
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 Technology Fee is not currently assessed. However, if it is assessed in the future, it would be for technology that Red Wagon Club or its affiliates develop or license to franchisees, as well as for maintenance, support, and technology development services.
The FDD states that Red Wagon Club anticipates franchisees would pay these amounts directly to designated third-party vendors. However, Red Wagon Club may require franchisees to pay the Technology Fee directly to them. The amount of the Technology Fee is subject to increase at Red Wagon Club's discretion based on the technology used in the operation of Red Wagon Club businesses.
Red Wagon Club specifies that they will not increase this fee by more than $500 in any given month of the term of a Franchise Agreement. This provides some predictability for franchisees in terms of potential cost increases. It is important to note that while the fee is not currently assessed, Red Wagon Club retains the right to implement it in the future, which could impact a franchisee's operating costs.