Is there a limit to how much the Red Wagon Club can increase the technology fee in a month?
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, while a technology fee is not currently assessed, Red Wagon Club retains the right to implement one in the future. This fee would cover technology that Red Wagon Club or its affiliates develop or license to franchisees, as well as maintenance, support, and technology development services.
Although the amount of the technology fee is subject to change at Red Wagon Club's discretion based on the technology used in the business's operation, there is a limit to how much the fee can increase in any given month. Specifically, Red Wagon Club states that they will not increase this fee by more than $500 in any single month during the term of the Franchise Agreement.
It's important to note that while Red Wagon Club anticipates franchisees would pay these technology fees directly to designated third-party vendors, they reserve the right to require franchisees to pay the Technology Fee directly to Red Wagon Club. This detail is important for prospective franchisees to consider as it affects cash flow management and expense tracking.