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Cartridge World Franchise Cost & Fees

Date of Incorporation: 1988
Franchising Since: 1997
U.S. Headquarters: McHenry, Illinois
Country of Origin: Australia

Business Description: Cartridge World North America, LLC (CWNA) is the franchisor of the Cartridge World System in North America. Cartridge World North America, LLC was formed as a limited liability company in the State of Nevada in June, 2002, and began offering Cartridge World Master Franchises in late 2002. Franchisees will directly enter into a Unit Franchise Agreement for the establishment and operation of a store with a master franchisor that franchises Cartridge World stores in a specified area for CWNA.

Franchise Offer: The master franchisor offers, and awards, to qualified applicants, a Unit Franchise which provides products and services related to printer (and other) cartridges, inkjet cartridges; toner, computer hardware (including printers) and software, ancillary products and services; and such additional products and services as it may specify.

Financial Assistance: CWNA does not offer direct or indirect financing. CWNA does not guarantee the franchisee’s note, lease or obligation. CWNA is a member of the SBA Franchise Registry. This affiliation may assist franchisees with obtaining expedited loan processing if they should decide to obtain SBA financing.

Training and Assistance: Before opening the Unit Franchise, franchisees must complete the initial training program to the master franchisor’s satisfaction. If franchisees have been previously trained, the franchisor can choose to not provide training, or to provide a revised and/or shortened program. If the Unit Franchise is owned by more than one person or if the Unit Franchisee is a Business Entity, then the Designated Individual identified in the Unit Franchise Agreement must complete the initial training program and comply on an ongoing basis with all training requirements. Franchisees are responsible for having their managers trained, and the franchisor can require that managers attend initial training at the franchisee’s expense. Franchisees must attend additional and/or refresher training programs, including national and regional conferences, conventions and meetings, and the franchisee’s employees may be required to attend mandatory training programs presented in their area.

Territory: Franchisees will not receive an exclusive territory. However, the master franchisor/CWNA grants franchisees some territorial protection in their Territory during the term of the Unit Franchise Agreement. CWNA will not open or authorize anyone else to open another Unit Franchise inside the Territory during the first 24 months of the term of the Unit Franchise Agreement. Territories vary among franchisees, depending upon area demographics, population density, market conditions and other factors. The Territory will be determined by political boundaries and/or described in words or on a map. Generally, the Territory will encompass a bigger area if the Unit Franchise is located in suburban areas than if located in densely populated urban areas. The Territory generally will not include any area that is cut off by a natural barrier (for example, a river, gorge, or mountain range) from the portion of the Territory in which the Unit Franchise is operated, without navigable crossings (such as a bridge or road).

Term of Agreement and Renewal: The term of the franchise agreement is 10 years with an option to renew for a single 10-year term, if requirements are met.

Obligations and Restrictions: A person who has successfully completed all training required by the master franchisor and who meets all of their other then-current standards must personally manage the Unit Franchise on a full-time basis. The franchisor recommends, but does not require, that the franchisee personally manage the Unit Franchise on a “hands-on” basis. Franchisees must operate their Unit Franchise in accordance with system standards, including required products and services.

Estimated Number of Units: 1,065

Investment Tables:
Initial Investment
Name of Fee Low High
Initial Franchise Fee $50,000 $50,000
Opening Inventory $2,000 $7,500
POS System and Other Equipment (Including Shipment Costs) $7,500 $10,500
Personal Computer Hardware and Software $0 $1,500
Signs, Furnishing and Fixtures $7,500 $15,000
Business Licenses, Utility Deposits or other Pre-Paid Expenses $300 $800
Grand Opening $5,000 $5,000
Insurance (one year coverage) $500 $2,000
Training Costs $500 $2,000
Facility Services Fee $1,500 $1,500
Real Estate Costs $1,500 $5,000
Construction and Remodeling $2,000 $20,000
Additional Funds (3 months) $12,000 $25,000
Estimated Total $90,800 $145,300
Other Fees
Type of Fee Amount
Royalty 6% of Gross Revenue PLUS 6% of Gross Profit (not Gross Revenue) on Ancillary Items.
Marketing Fund Contribution Currently 2% of Gross Revenue, up to a maximum of 4% of Gross Revenue PLUS up to a maximum of 4% of Gross Profit (not Gross Revenue) on Ancillary Items.
Cartridge World Business Co-ops (CWBC) The amount established by members of the CWBC.
Interest on Late Payments Interest is highest legal rate for open business credit, not to exceed 1.5% per month.
Late Fees; Costs of Collection $200 administrative fee for each late payment or report; the franchisee will pay all reasonable costs of collection the franchisor incurs.
Renewal Unit Franchise Fee 20% of the then-current Initial Franchise Fee, subject to $5,000 minimum.
Convention Registration Fee Established based on the event.
Transfer Fee $10,000, plus then-current training costs.
Management Fees $500 per day management fee, plus expenses.
Operations Fee Currently $125 per month for Unit Franchises using Retail Pro POS System and $180 for Unit Franchises using Malibu POS System (subject to adjustment).
Training and In-Territory Consultation Costs Costs/fees determined by training attended/staff participation.
Audit/Inspection Charges Amount of understatement of Revenue, with interest and late charges, plus costs of audit, if applicable.
Indemnification Will vary under the circumstances.
Securities Offering Fee $10,000 or CWNA's actual expenses, whichever is greater.
Grant of Security Interest The franchisee grants CWNA a security interest in assets and proceeds of Express Business.
Non-Conformity Fee 50% of Gross Revenue received by the franchisee from non-conforming activity.
Purchasing Cooperative As specified by by-laws rules, regulations and procedures for cooperative.
Evaluation Costs Generally will not exceed $500

The above information has been taken from the FDD of Cartridge World. Year of FDD: 2015

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