When is the Program Fee due for a Red Wagon Club franchise?

According to Red Wagon Club's 2024 Franchise Disclosure Document, the Program Fee is due monthly, on the 10th of each month. The obligation to pay this fee begins on the first day of the calendar month immediately following whichever comes first: the date the franchisee commences operations, or 180 days after the effective date of the Franchise Agreement, which is referred to as the "Program Fee Commencement Date".

The Program Fee itself varies over time. For the first three calendar months after the Program Fee Commencement Date, the fee is $2,500 per month. It then increases to $5,000 per month for the fourth through sixth months following the Program Fee Commencement Date. Finally, the Program Fee increases to $7,500 for each month following the Program Fee Commencement Date.

Prospective Red Wagon Club franchisees should note that the Program Fee is an ongoing monthly expense, and the amount increases over the first six months of operation. Franchisees need to factor these escalating costs into their financial projections and ensure they have sufficient capital to cover these fees, especially during the initial ramp-up period of their business. Understanding the timing and amounts of these fees is crucial for managing cash flow and achieving profitability.