What is the purpose of the Red Wagon Club 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, the Technology Fee is designed to cover technology that Red Wagon Club or its affiliates develop or license to franchisees. It also covers maintenance, support, and technology development services provided by Red Wagon Club or its affiliates.
Currently, Red Wagon Club does not assess this fee. However, they may implement it in the future. If assessed, the Technology Fee would be paid monthly, typically by the 10th of each month. While the exact amount is not specified, Red Wagon Club notes that increases to the fee are capped at $500 in any given month during the term of the Franchise Agreement.
Red Wagon Club anticipates that franchisees would pay these amounts directly to designated third-party vendors. However, Red Wagon Club retains the option to require franchisees to pay the Technology Fee directly to them. This fee structure is fairly common in franchising, as franchisors often provide ongoing technology support and updates to their franchisees and need a mechanism to cover these costs.