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CMIT Solutions Franchise Costs & Fees

Date of Incorporation: 1994
Franchising Since: 1998
Headquarters: Austin, Texas

Business Description: CMIT Solutions, Inc. is the franchisor. Franchisees operate an information technology (IT) services business under the name “CMIT Solutions” offering a wide variety of IT services, including professional and managed services, along with alliance partner product and service offerings primarily to small businesses.

Franchise Offer: The CMIT Solutions franchise program includes the common use and promotion of the trademark “CMIT Solutions” and other marks the franchisor specifies for use with the CMIT Solutions franchised business; standards, specifications and procedures for the offering of its specialized IT Professional and Managed Services (Managed services is the practice of transferring day-to-day information technology management responsibility to an outside provider as a strategic method for improved effective and efficient business operations) franchises; distinctive and uniform standards; quality and uniformity of services and products offered; procedures for financial control; training and assistance; and advertising and promotional programs.

Financial Assistance: The franchisor offers limited financing of a portion of the Initial Fee to qualified applicants who are converting an existing business to the CMIT Solutions System.

Training and Assistance: The training for new franchisees is comprised of 2 principal components. This first is a 3 week pre-training Franchise Opener program which consists of Business Setup, Orientation to CMIT, Marketing preparation, training and lead generation. The second is an in-person training program conducted over a 2-week period in Austin, Texas at the franchisor’s headquarters, or at another training facility it designates. Training is on-going, and there are additional training or ‘refresher’ courses offered. CMIT holds regular webinars for franchisees and technicians, the annual convention and periodic certification training for each new product launch, multiple Mastermind mentoring groups and Business Coaching.

Territory: The franchisor awards territories in which franchisees may offer CMIT Solutions services to prospects and customers. The franchisor defines Territories by Postal Service Zip Codes. Within the Territory, the franchisee and the franchisor will agree that there are a specified number of businesses and/or commercial offices that meet the then current demographic formulation. The minimum Territory contains 3,000 Small Business Establishments and will not exceed 3,999 Small Business Establishments. The typical Territory includes approximately 3,500 Small Business Establishments.

Term of Agreement and Renewal: The length of the initial franchise term is 10 years. If franchisees are not in default and satisfy certain conditions, they may renew for an additional 10 years.

Obligations and Restrictions: Franchisees, one of their principal owners, or a designated manager who has completed the Initial Training Program to the franchisor’s satisfaction, must provide on-site supervision of the Franchised Business. Neither franchisees, nor their officers, directors, or persons owning 10% or more equity interest in the entity, nor their partners, if franchisees are a partnership, nor their designated manager may maintain, engage in, have a controlling interest in, lend money to, consult with, or assist any business that is engaged in offering Information Technology support services to either the business or residential market or related products or services. Franchisees must sell or offer for sale all services and products that the franchisor requires, and only the services and products that it approves, and only in the manner that it prescribes.

Estimated Number of Units: 155

Investment Tables:
Initial Investment
Name of Fee Low High
Franchise Fee $49,950 $49,950
Territory Fee $1,100 $10,989
Business Licenses $550 $1,500
Travel, Food and Lodging while Training $2,200 $2,500
Real Estate and Leasehold Improvements Varies; not required
Furniture and Equipment including Laptop Computer $0 $2,500
Advertising and Marketing (includes $2,000 to $4,000 for initial business list) $16,000 $18,000
Technical Staffing (approximately $3,000 monthly minimum) $18,000 $30,000
Start-up Supplies $500 $1,000
Business Working Capital; Additional Funds (for 6 months) $40,000 $60,000
ESTIMATED TOTAL (Does not include optional real estate costs) $128,300 $176,439
Other Fees
Type of Fee Amount
Royalty No Royalty fee is due for the first month immediately following the month franchisees complete the initial CMIT Solutions franchise training. The Royalty is calculated by a sliding scale of 6% to 0% of Gross Professional Services (GPS) revenue or minimum royalty whichever is greater.
Affiliate Royalty (Applies only where an existing business is converting to the CMIT Solutions System; the standard “Royalty” shown above does not apply.) No Royalty fee is due for the first month immediately following the month franchisees complete the initial CMIT Solutions franchise training. For months 2-25 Royalty for Affiliate franchisees will be calculated under “GPS Revenue Exclusion” and based upon the royalty table in the Franchise Agreement showing the % due or the minimum royalty, whichever is greater.
Marketing Development Fund No Fund Contribution is due for the first month immediately following the month franchisees complete the initial CMIT Solutions franchise training. Thereafter, the MDF contribution will be calculated by a sliding scale of 2% to 0 % of Gross Professional Services revenue, or the minimum MDF contribution, whichever is greater.
Affiliate Marketing Development Fund a) No Fund Contribution is due for the first month immediately following the month franchisees complete the initial CMIT Solutions franchise training.
b) Months 2-25; Sliding scale of 2% to 0 % of Gross Professional Services revenue or minimum MDF contribution, whichever is greater.
Regional Cooperative Advertising Fund (if applicable) To be determined by members of the cooperative, but not to exceed $1,000 per month.
Additional Training $1,500 per person for the entire Initial Training Program, or our then-current fee.
Electronic Fund NFS Fee Amount charged by the franchisor’s financial institution, or $100, whichever is greater. This amount may be lower in some states under state law.
On-site Training and Coaching Per diem fee of the trained representatives plus their costs of travel, lodging, meals and wages or the costs of travel, lodging, meals for the franchisor’s staff for training and/or coaching.
Software Enhancements To be determined by the type of enhancement.
Technology Fee $75 per month per unit franchise, or the then current fees.
Managed Services a) An ongoing monthly fee of $3.30 per workstation and up to $33.00 per server under management, or the then-current fees.
b) An ongoing monthly fee of $17.60 per user for help desk and NOC services during business hours, including the support for one workstation, or $21.73 for 24-hour help desk and NOC services, or the then current fees. Server cost remains at $33.00 or the then current fees.
Autotask $76 per month for 2 users, (this base fee includes 1 free helpdesk user), $38 for each additional license. There is a one-time $60 set up fee, or the then-current fee.
Renewal Fee $2,500 for one or more Franchise Agreements being renewed at the same time.
Convention $650 or the then-current fee.
Franchise Broker Resale Fee Then-current fee as contracted between CMIT and the broker referring a buyer. The range for the Franchise Broker Resale Fee is currently $24,000, or 10% of the purchase price – whichever is higher.
Franchise Transfer Fee $8,000 ($5,500 if the transfer is to an existing franchisee).
Death or Disability Management Fee A cash reserve sufficient to allow CMIT to provide management of the operations of the Franchised Business, must be set aside as compensation for the management services provided, in addition to the Royalty Fees and Fund Contributions due under the Franchise Agreement. At a minimum this would be 20% of the gross sales for one-quarter year or 90 days of the Franchised Business revenue.
Late Payment Fee 1-1/2% interest per month (or maximum legal rate, if lower) on unpaid balance.
Late Report Fee $100 per violation.
Collection Costs All collection costs including reasonable attorneys' fees.
Indemnification Will vary under circumstances.

The above information has been taken from the FDD of CMIT Solutions. Year of FDD: 2016

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