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sweetFrog Frozen Yogurt Franchise Costs & Fees

Date of Incorporation: 2009
Franchising Since: 2012
Headquarters: Richmond, Virginia

Business Description: Franchisees operate a sweetFrog store (shop), which sells frozen yogurt using a self-serve delivery format, under a Franchise Agreement with SFF, LLC, the franchisor.

Franchise Offer: The franchisor offers the right to establish and operate a sweetFrog Shop under the Franchise Agreement. sweetFrog Shops operate in compliance with the franchisor’s business system which includes methods and procedures for establishing and operating sweetFrog Shops.

Financial Assistance: The franchisor does not offer direct or indirect financing, and the franchisor does not guarantee franchisees’ notes, leases or other obligations.

Training and Assistance: Two management personnel must attend and be certified in the initial management training program. Currently, training is conducted in Richmond, Virginia. Initial training generally lasts approximately 2-10 days, depending on the trainee’s experience level. The franchisor may require franchisees or their management personnel to attend additional training programs and seminars and be certified in those programs.

Territory: Franchisees will not receive an exclusive territory. Franchisees may face competition from other franchisees, from outlets the franchisor owns or from other channels of distribution or competitive brands that it controls. The Franchise Agreement gives franchisees the right to operate a sweetFrog Shop at a site we accept as meeting the franchisor’s site selection guidelines. Franchisees must select the site for their Shop from within the nonexclusive Designated Area identified in the Site Addendum to their Franchise Agreement. There is no minimum area that will comprise the Designated Area, but the franchisor determines the Designated Area and insert it in the Franchise Agreement before franchisees sign the Franchise Agreement.

Term of Agreement and Renewal: The length of the initial franchise term is 10 years. Franchisees will have the option to renew the franchise for one additional consecutive 10-year renewal term, if requirements are met.

Obligations and Restrictions: When franchisees sign the Franchise Agreement and Development Agreement (if applicable), they must designate an individual to serve as their “Principal Owner.” The Principal Owner must own an equity interest in the franchise, meet our qualifications and must be approved by the franchisor. The Principal Owner for all sweetFrog Shops operated by franchisees and, if applicable, their affiliates, must be the same person, and the same person must act as their Principal Owner under the Development Agreement and all Franchise Agreements between the franchisee and franchisor. There is no minimum required equity interest for the Principal Owner. All products franchisees use or sell at the Shop must conform to the franchisor’s standards and specifications. Franchisees must offer and sell only the menu items, products and services that the franchisor has expressly approved in writing.

Estimated Number of Units: 350

Investment Tables:
Initial Investment
Name of Fee Low High
Initial Franchise Fee $30,000 $30,000
Leasehold Improvements/Construction $85,000 $140,000
Furniture, Fixtures and Equipment, Including Soft-Serve Machines $65,000 $120,000
Lease, Security Deposits $3,000 $8,000
Utility Deposits $500 $2,000
Design and Architectural/Engineering Fees $3,000 $10,000
Interior and Exterior Signage; Décor Package $5,000 $7,500
Other Equipment $1,500 $3,500
Grand Opening Marketing $5,000 $5,000
Travel & Living Expenses during Initial Training $1,000 $2,000
Insurance $2,000 $5,000
Business Licenses & Permits $1,500 $3,500
POS Systems $9,000 $12,000
Office Equipment & Supplies $500 $1,000
Opening Inventory $3,500 $8,000
Professional Fees $0 $10,000
Construction Management $0 $18,000
Additional Funds – for initial 3 month period $45,000 $60,000
ESTIMATED TOTAL $260,500 $445,500
Other Fees
Type of Fee Amount
Royalty Fee 5% of Net Sales.
System-wide Marketing Fund Up to 3% of Net Sales to be divided among System-wide Marketing Fund (SMF) and Local Advertising (or a co-operative). Currently, the total Marketing Assessment will be 2% of Net Sales as follows: 1% for SMF and 1% for Local Advertising.
System-wide Marketing Fund 1% of Net Sales.
Co-operative Amount determined by the co-operative when established.
Local Advertising Currently, 1% of Net Sales.
Advertising and Promotional Material Reasonable fee, which currently will not exceed $1,000 for each set of materials.
Additional Training or Training Additional, Successor or Replacement Personnel Reasonable fee, which is currently $1,000 per week.
Alternative Product or Supplier Inspection and Testing Cost of inspection and of the test (including the franchisor’s administrative expenses), which currently will not exceed $2,000 for each new supplier or product.
Audit Fee All cost and expenses the franchisor incurs, which currently will not exceed $5,000
Costs and Attorneys’ Fees The franchisor’s costs and expenses.
Costs for Correction of Deficiencies Reasonable fee for the franchisor’s expenses in taking corrective action (including costs of re-inspection), which currently will not exceed $1,500 per violation.
Customer Satisfaction Programs All costs related to the Shop for these programs, which is currently up to $55 per month for the 1-800 call in number and $100 per visit for secret shoppers.
Enforcement Costs and Expenses Any and all costs and expenses incurred by the franchisor in enforcing the terms of the Franchise Agreement. The franchisor can collect these costs and expenses upon franchisees’ default without filing an action against them.
Indemnification Varies according to loss.
Interim Management After Termination Reasonable fee for management services, which is currently $5,000 per month.
Interest Lesser of: 18% per year or the maximum lawful rate.
Intranet Fee A reasonable amount based on our actual cost to support franchisees’ usage (which will not exceed $700 annually).
Insurance Fee Cost of insurance plus the franchisor’s reasonable expenses incurred in obtaining the insurance on the franchisee’s behalf.
Liquidated Damages For early termination of the Franchise Agreement, a lump sum equal to the royalty fee percentage multiplied by the weekly average of the Net Sales for the 52 week period preceding the effective date of termination multiplied by the lesser of (i) twenty-four (24) weeks (the equivalent of 6 months) or (ii) the number of weeks remaining in the term.
Merchandise for Resale; Equipment; Décor Items Reasonable cost, which currently ranges from $3,000 to $10,000
On-site Additional or Remedial Training Then-current per diem fee plus expenses incurred by the franchisor’s representatives. Currently, the per diem fee is $250
Renewal Fee 50% of the then-current initial franchise fee.
Relocation $2,500
Securities Offering Fee The franchisor’s reasonable costs and expenses (including legal and accounting fees and costs) associated with reviewing the offering materials.
Software or Systems Modifications Reasonable fee for any software or systems modifications enhancements made for the franchisor that it or its affiliates license to franchisees. Currently, none.
Taxes Franchisees must reimburse the franchisor for any taxes imposed on the franchisor by reason of furnishing products, intangible property (including the trademarks) or services to franchisees.
Transfer Fee Franchise Agreement: $2,500

The above information has been taken from the FDD of sweetFrog Frozen Yogurt. Year of FDD: 2015

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