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The Bad Ass Coffee Franchise Cost & Fees

Date of Incorporation: 1989
Franchising Since: 1995
Headquarters: Salt Lake City, Utah

Business and Description: The Bad Ass Coffee Company of Hawaii, Inc. (BACH) is the franchisor. Franchisees operate retail coffee stores known as “Bad Ass Coffee of Hawaii” which will market a variety of coffee beverages, coffee beans, related food items, accessories, gifts and other related products to the general public. The franchisor also offers a similar drive-through franchise.

Franchise Offer: There are two Bad Ass Coffee of Hawaii store franchises. A standard Bad Ass Coffee of Hawaii store franchise and a smaller Bad Ass Coffee of Hawaii drive-through franchise.

Financial Assistance: BACH does not offer direct or indirect financing nor does it guarantee any of its franchisees’ notes, leases or other obligations.

Training and Assistance: The length of training depends on the franchisee’s prior experience, but is generally five days. Training must be completed no later than two weeks prior to opening the business and all training must be done to the satisfaction of the BACH before the franchisee will be able to open the store and training may be extended until the franchisee and his or her manager completes the training to BACH’s satisfaction. During the management training course, the franchisee and designated trainees will be instructed in store operations and management and will be given “hands on” experience in all phases of store operations at an existing Bad Ass Coffee of Hawaii store. BACH is not required to provide in-person, ongoing assistance; however, if the franchisee feels additional assistance is necessary, BACH will provide assistance and supervision at the store location for the standard rate charge.

Territory: As a standard or drive-through franchisee, the territory will be limited to the store location. Franchisees will not be assigned an exclusive territory for the franchise business.

Term of Agreement and Renewal: The length of the initial term is five years. If the franchisee is in good standing at the end of the initial term, he or she can renew for terms of 10 years up to 25 years total counting initial and renewal terms.

Obligations and Restrictions: The franchisee must personally participate in the operation of the franchise business, but need not manage the business full time. BACH requires on-premises supervision by the franchisee or designated manager. The franchisee may carry and serve only those products, goods, and services specified and approved by BACH in writing. The franchisee must offer all products, goods and services required by BACH. The franchisee must strictly follow the policies, procedures, specifications, methods and techniques concerning all of Bad Ass Coffee of Hawaii products, services and recipes.

Estimated Number of Units: 215

Investment Tables:
Initial Investment for a Standard Franchise Store
Name of Fee Low High
Initial Franchise Fee $35,000 $35,000
Travel & Living Expenses While Training (three people) $5,000 $8,000
Real Estate & Improvements $100,000 $200,000
Equipment $55,000 $60,000
Signs $5,000 $15,000
Misc. Opening Costs $2,000 $4,000
Opening Inventory $5,000 $15,000
Advertising - 3 Months $8,000 $11,000
Additional Funds - 3 Months $20,000 $35,000
ESTIMATED TOTAL (excluding the lease or purchase of real property and advertising fess) $235,000 $383,000
Initial Investment for a Drive-Thru Franchise Store
Name of Fee Low High
Initial Franchise Fee $35,000 $35,000
Travel & Living Expenses While Training (three people) $5,000 $8,000
Real Estate/SiteImprovements $20,000 $50,000
Prefab Drive Through $60,000 $60,000
Equipment $63,000 $68,000
Signs $5,000 $15,000
Misc. Opening Costs $2,000 $4,000
Opening Inventory $5,000 $15,000
Advertising - 3 Months $8,000 $11,000
Additional Funds - 3 Months $10,500 $15,000
ESTIMATED TOTAL (excluding the lease or purchase of real property and advertising fees) $213,500 $276,000
Other Fees
Type of Fee Amount
Royalties 6% of gross sales weekly.
Advertising Fee 2% of gross sales weekly.
Advertising Cooperative 1% of gross sales payable to the coop, if established.
Local Advertising Requirement 1% of gross sales.
Additional On-Site Assistance Currently $500 per day per representative plus travel, food and lodging expenses (if at the franchisee's location)
Transfer $2,500
Late Charges $25 per day up to $250 plus 18% interest.
Renewal Fee $2,500
Fees on Default and Indemnity Attorney’s fees, costs, interest and audit costs.
Audit Charge Cost of audit.
Operation of the franchise business in case of unapproved absence, incapacity or death, Interim Management Fee $500 per day, per representative, or the then-current rate, plus food, travel and lodging for the representative(s) and other expenses which may be incurred by the franchisor to perform such services. (Estimated at $100 per day)
Testing Fee Reasonable expense at cost but not less than $500
Franchise Agreement Deposit Fees $1,000
Transfer Training Fee $5,000 plus travel, food and lodging for five days.
System Compliance Various charges ranging from $50 - $100 per day for non-compliance.
System Non-compliance Fines and Charges Amount to be specified in the Operations Manual. Currently ranges between $50 to $100
Consumer Complaint Resolution Fee $20 to $50 per incident of the current fee plus any costs incurred by BACH.

The above information has been taken from the FDD of The Bad Ass Coffee. Year of FDD: 2014

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