Pretzelmaker Franchise Cost & Fees
Date of Incorporation: 1991
Franchising Since: 1992
Headquarters: Atlanta, Georgia
Business Description: PM Franchising, LLC, the franchisor, offers franchises for the operation of Pretzelmaker stores that offer soft pretzels, pretzel toppings, beverages and other food products under the Pretzelmaker mark.
Franchise Offer: The franchisor offers the opportunity to become a franchisee to develop and operate Stores which specialize in selling hand-rolled soft pretzels of various flavors, frozen pretzels, pretzel dogs, pretzel bites, and other pretzel-related products and toppings, and related food items and beverages. The franchisor offers 2 types of Stores: (a) Traditional Stores; and (b) Non-Traditional Stores. In addition, if franchisees own and operate a Store, in certain circumstances the franchisor will offer the right to offer and sell products at a separate location that it approves (Satellites).
Financial Assistance: Neither the franchisor nor any agent or affiliate offers direct or indirect financing to franchisees, guarantees any note, lease or obligation of franchisees, or has any practice or intent to sell, assign or discount to a third party all or any part of any financing arrangement of franchisees.
Training and Assistance: The franchisor will provide initial training in the System and its policies and procedures to franchisees (or their Operating Principal, if franchisees are an Entity), their initial manager of the Store (the Manager), and any other employees that the franchisor designates. The franchisor provides initial training as frequently as it deems necessary at its offices, currently in Atlanta, Georgia, or at any other location that it designates, including other Stores or the franchisee’s Store. Franchisees must attend 3 days of on-the-job training at a designated training location for purposes of practical application of skills taught during classroom training. Franchisees also must attend 5 additional days of training at the franchisor’s offices. The franchisor may periodically conduct advanced training programs for franchisees, their Operating Principal, their Managers, and/or their employees at its office or another location that it designates.
Territory: Franchisees will not receive an exclusive territory. Franchisees may face competition from other franchisees, from outlets that the franchisor owns, or from other channels of distribution or competitive brands that the franchisor controls. The franchise is for the specific site that the franchisor approves. Franchisees must locate an acceptable site within the non-exclusive Site Selection Area that the franchisor specifies.
Term of Agreement and Renewal: The length of the initial franchise term is 10 years. One additional 10 year term is available, if franchisees meet the conditions.
Obligations and Restrictions: Franchisees must devote their full-time, best efforts to the proper and effective operation of the Store. In addition, the Store must have at least one Manager. If franchisees are an individual, they may serve as the Manager or they may designate a Manager. If franchisees are an Entity, they must designate a Manager and they must appoint an individual owner as the “Operating Principal” who must have authority over all business decisions related to the Store and must have the power to bind the franchisee in all dealings with the franchisor. Franchisees may offer for sale in the Store only the products and services that the franchisor has approved in writing. Franchisees must offer all items that we designate as mandatory.
Estimated Number of Units: 285
|Name of Fee||Low||High|
|Initial Franchise Fee||$15,000||$15,000|
|Grand Opening Marketing||$3,000||$5,000|
|Travel and Living Expenses While Training||$2,000||$4,000|
|Other Opening Inventory||$500||$1,000|
|Furniture, Fixtures, Equipment and Décor||$60,000||$85,000|
|Prepaid Rent and Security Deposit||$2,500||$5,000|
|Business Licenses, Permits, etc. (for first 6 months)||$1,500||$2,500|
|Insurance (3 months)||$2,000||$3,500|
|Additional Funds (3 months)||$8,000||$12,000|
|Name of Fee||Low||High|
|Initial Franchise Fee||$5,000||$5,000|
|Grand Opening Marketing||$1,000||$3,333|
|Travel and Living Expenses While Training||$1,000||$5,000|
|Other Opening Inventory||$5,700||$10,150|
|Furniture, Fixtures, Equipment and Décor||$20,000||$40,000|
|Prepaid Rent and Security Deposit||$2,500||$5,000|
|Business Licenses, Permits, etc. (for first 6 months)||$1,000||$1,675|
|Insurance (3 months)||$1,500||$2,100|
|Additional Funds (3 months)||$1,000||$5,000|
|Type of Fee||Amount|
|Royalty Fee||7% of Net Sales for the preceding week.|
|Marketing Fee||1.5% of your Net Sales for the preceding week.|
|Continuing Inventory||Cost plus a reasonable mark-up.|
|ACH and Check NSF Fee||The franchisor’s out-of-pocket costs and an administrative fee (currently $30 to $50).|
|Interest||18% per year (or maximum legal rate, if less).|
|Late Fee||$25 per week.|
|Additional Training||Currently, $300 per employee or agent for each full or partial day.|
|Additional Consulting Services||Currently, $300 per employee or agent for each full or partial day, plus their travel and living expenses.|
|Assigned Trainers||The franchisors actual costs and expenses, including travel and living expenses for trainers.|
|Product, Service, Supplier, and Service Provider Review||The franchisor’s reasonable cost of inspecting the supplier, testing the proposed product, or evaluating the service provider or proposed service, including personnel and travel costs; this cost will not exceed $5,000|
|Transfer Fee||$10,000 for a transfer of the Store or Franchise Agreement.|
|Transfer Referral Fee||$15,000|
|Successor Fee (Renewal) for Traditional Store and Co-Brand Store||20% of the then-current Franchise Fee.|
|Successor Fee (Renewal) for Satellite Store||$2,500|
|Insurance||Cost of the premium (usually $2,500 to $5,000) plus a reasonable fee ($50 per hour) for our services in procuring the insurance.|
|Audit||Cost of audit, including travel and living expenses, plus interest on the amount of the under-payment at an annual rate of the lesser of 18% or the maximum interest rate permitted by law.|
|Inspection||The franchisor’s reasonable expenses incurred in inspecting the franchisee’s business, including travel and living expenses, wages, and other expenses for the franchisor’s employees; this cost will not exceed $5,000|
|Convention or Meeting Attendance||As the franchisor determines based on its costs of holding the convention or meeting.|
|Remedial Expenses||The franchisor’s reasonable expenses incurred in correcting the franchisee’s operational deficiencies; this cost will not exceed $10,000 per deficiency.|
|Enforcement Expenses||The franchisor’s reasonable cost of de-identifying the Store; this cost will not exceed $10,000|
|Indemnification||The franchisor’s liabilities, fines, losses, damages, costs, and expenses (including reasonable attorneys’ fees).|
|Liquidated Damages||Liquidated damages are calculated as (i) the average of the franchisee’s monthly Royalty Fees and Marketing Fees due for the 12 months before the franchisor’s delivery of the notice of default or termination of the Franchise Agreement (or for any shorter time that the Store has been open), (ii) multiplied by the lesser of 36 or the number of months remaining in the then-current term of the Franchise Agreement, (iii) discounted to present value using the then-current prime rate of interest quoted by our principal commercial bank.|
|Test Products||$50 - $500|
The above information has been taken from the FDD of Pretzelmaker. Year of FDD: 2016
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