When does the obligation to pay the Program Fee begin 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 obligation to pay the Program Fee begins on the first day of the calendar month immediately following whichever comes first: the date you start operating your Red Wagon Club business, or 180 days after the Franchise Agreement's effective date. This date is referred to as the "Program Fee Commencement Date."
Franchisees should note that the Program Fee is not a one-time charge but rather an ongoing monthly expense. The amount varies over time: $2,500 is due monthly from the Program Fee Commencement Date through the third calendar month. The fee then increases to $5,000 monthly for the fourth through sixth months following the Program Fee Commencement Date. After that, the Program Fee increases again to $7,500 per month for the seventh month and each month thereafter.
These fees are due on the 10th of each month. It's important for prospective Red Wagon Club franchisees to factor these escalating monthly Program Fees into their financial projections and business plans, as they represent a significant and increasing operational expense.