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Menchie's Franchise Cost & Fees

Date of Incorporation: 2008
Franchising Since: 2008
Headquarters: Encino, California

Business Description: Menchie’s Stores offer for sale soft-serve frozen yogurt, ice cream, desserts and beverage items and other related products.

Franchise Offer: The franchisor grants the right to operate a store under the “Menchie's” trademark and other marks.

Financial Assistance: Neither the franchisor nor any of its affiliates offer any direct or indirect financing. The franchisor does not guarantee a franchisee’s notes, leases, or any obligation. Direct Connect Ventures, LLC is a recommended service provider for new and existing franchisees that can assist and guide them with obtaining the necessary funding options for startup and expansion financing that include and are not limited to the standard Small Business Administration 7(a) loan program.

Training and Assistance: The franchisor will train the franchisee, the Operating Partner, and one of the franchisee’s manager-level employees to operate a Menchie's Store. Fourteen days of training is provided (although the specific number of days depends on Menchie’s opinion of the franchisee’s experience and needs). The franchisor will send one of its representatives to the franchisee’s Store to educate, train, conduct final inspection and assist with the Store opening. The franchisor (or Operating Partner) and/or other previously trained and experienced employees must attend and satisfactorily complete various training courses the franchisor periodically provides.

Territory: The franchisee will operate the Store at a specific location that the franchisor first must approve. The franchisor will not locate another Menchie’s Store, whether operated by another franchisee, the franchisor or one of its affiliates any closer than two miles from the main entrance of the Store. The boundaries of the Designated Territory may depend upon any major topographical features which clearly define a contiguous area, like rivers, major freeways, etc.

Term of Agreement and Renewal: The length of the initial franchise term is 10 years. Renewal is for three additional term(s) of 10 years each, if requirements are met.

Obligations and Restrictions: The day-to-day operations of the Menchie's business must be managed at all times by the franchisee (or Operating Partner) or an Assistant Store Leader who has satisfactorily completed the training program. The franchisee must attend any annual meeting, convention or conference of franchisees and all meetings related to new products or product preparation procedures, new operational procedures or programs, training, management, sales or sales promotion or similar topics that the franchisor offers, at his or her own expense. The franchisee may not offer or sell any products or perform any services that have not been authorized.

Estimated Number of Units: 500

Investment Tables:
Initial Investment
Name of Fee Low High
Franchise Fee $40,000 $40,000
Training Expenses $2,430 $5,000
Development Services Fee $1,920 $1,920
Rent Deposit $2,500 $10,000
Leasehold Improvements $90,000 $135,000
Furniture, Fixtures, and Equipment $69,792 $132,800
Computer (POS) System $5,990 $5,990
Signage $1,900 $10,000
Opening Inventory $3,000 $4,000
Uniforms, Merchandise, Equipment and Sales $3,000 $3,000
Advertising $4,000 $10,000
Utility Deposits, Security Deposits, Business Licenses, etc. $1,000 $3,500
Inspection Fee $0 $1,500
Additional funds — 3 months $6,000 $36,000
Estimated Total $230,507 $392,710
Other Fees
Type of Fee Amount
Royalty Fee 6% of Gross Sales.
Marketing Fee 2% of Gross Sales.
Local Advertising Fee $10,000
Franchisee Ad Co-op Fee To be determined by the Co-op.
Audit Fee Cost of audit. Precise estimate is unknown, but is estimated to range from $100 to $2,000.
Late Fee 10% of the amount due.
Interest on Late Payments The lesser of 1.5% per month or the maximum amount permitted by applicable law.
Additional Training Fee To be determined by the franchisor, but not to exceed $500 per person per day.
Operations Manual $500
Alternative Supplier Evaluation Fees Various amounts to be determined by the amount of time and money necessary to evaluate the alternative supplier and/or the alternative product. Precise estimate is unknown, but is estimated to range from $500 to $5,000. This amount will include the franchisor’s costs and expenses associated with any testing, including travel and lodging expenses incurred by the franchisor to visit a supplier's facilities.
Renewal Fee 10% of the then current franchise fee.
Alternative Dispute Fee To be determined by the American Arbitration Association.
Transfer Fee 50% of our then current franchise fee.
Seminar and Convention Fees No charge for attending seminars or conventions. Fees for travel, food, and lodging will depend on distance traveled and accommodations which one chooses.
Costs and Attorneys' Fees Will vary under circumstances.
Indemnification Will vary under circumstances.
Insurance Will vary according to coverage and area.
Proprietary Software Various Amounts.
Grand Opening marketing Campaign $5,000
Inspection Fee The franchisor’s costs and expenses in conducting any subsequent pre-opening Store inspection. The franchisor estimates that this amount will not exceed $1,000

The above information has been taken from the FDD of Menchie's. Year of FDD: 2015

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