ITEM 5: INITIAL FEES
You pay a lump sum franchise fee of $37,500 ("Initial Franchise Fee") for a Full Market Territory (See ITEM 12) that is due upon your signing of the Franchise Agreement. (See Exhibit A). With our express written permission, which may be granted or denied in our sole discretion, you may be granted the right to expand your Territory by purchasing additional zip codes. You must pay us $1.54 for each targeted dog estimated to reside in each additional zip code. The Initial Franchise Fee is nonrefundable for any reason once paid.
All Initial Franchise Fees for Full Market Territories are uniform. During our last fiscal year ended December 31, 2009, the range of actual Initial Franchise Fees paid to us for Full Market Territories was $18,000 to $40,400.
You pay a lump sum reduced franchise fee of $20,000 ("Reduced Franchise Fee") for a Small Market Territory (See ITEM 12) that is due upon your signing of the Franchise Agreement. (See Exhibit A). The Reduced Franchise Fee is nonrefundable for any reason once paid.
All Reduced Franchise Fees for Small Market Territories are uniform. During our last fiscal year ended December 31, 2009, we collected one Reduced Franchise Fee in the amount of $18,000.
In addition to the Initial Franchise Fee or Reduced Initial Franchise Fee, you must pay us a training and territory fee ("Training and Territory Fee") of $19,500. We reserve the right to increase the Training and Territory Fee proportionally if you purchase additional zip codes for your Territory. The Training and Territory Fee pays for reserving your Territory and your initial training (See ITEM 12 and ITEM 11). This Training and Territory Fee also includes a start-up kit of Bark Busters Supplies and Bark Busters Products (See ITEM 8) required to commence operation of your Bark Busters Business. You must pay this fee when you sign your Franchise Agreement and the fee is non-refundable for any reason once paid.
All Training and Territory Fees for Full Market Territories and Small Market Territories are uniform. During our last fiscal year ended December 31, 2009, we collected uniform Training and Territory Fees of $19,500.
**Excerpt of Item 5 from Bark Busters 2010 FDD**
ITEM 6: OTHER FEES
|Type of Fee||Amount||Due Date||Remarks|
|Royalty1 (1)||8% of Gross Revenues (2)||Payable on the 1st and 16th of each month|
|Marketing, Advertising and Promotions Fund Fees1 (3)||2% of Gross Revenues (2)||Payable by the 1st and 16th of each month||Used for national and regional marketing, advertising, and promotional activities at Dingo's sole discretion.|
|Local Advertising Expense (4)||3% of Gross Revenues (2)||Payable monthly to your advertising suppliers as determined by you||Used for promoting your business in your community including local telephone or Internet directory advertising and geotargeting in your Territory.|
|Accounting Services Fee||Approximately $15 per month||Monthly||KeepMore.net by Sagefire|
|Toll-Free Number Feet||$120 per year||Annually||We reserve the right to increase this fee at any time upon 30 days notice to you.|
|Insurance (5)||Cost of insurance||As required or upon demand by us||Insurance requirements are set forth in Section 14 of the Franchise Agreement. If you fail to maintain insurance as required or we elect to obtain on your behalf, you must reimburse us for the cost of such insurance upon demand by us.|
|Technology Fee^||$450 to $800 per year||Payable quarterly after the start of operations||The price is currently $450 per year. We reserve the right to increase this fee at any time upon 30 days notice to you.|
|Computer Software and Hardware Upgrades (6)||Cost of computer hardware and software upgrades||As incurred||You must purchase upgrades for your computer hardware and software when we require you to do so.|
|Ongoing Inventory^ (7)||Varies based on your sales||Upon delivery||We charge you for the Bark Busters Products and the Bark Busters Supplies that you purchase from us. You will also purchase other supplies from designated or approved suppliers.|
**Excerpt of Item 6 from Bark Busters 2010 FDD**
ITEM 7: ESTIMATED INITIAL INVESTMENT
FULL MARKET TERRITORY YOUR ESTIMATED INITIAL INVESTMENT
|Type of Expenditure (1)||Amount||Method of Payment||When Due||To Whom Payment is Made|
|Initial Franchise Fee (2)||$37,500||Lump sum||At franchise signing||Dingo|
|Training and Territory Fee (3)||$19,500||Lump sum||At franchise signing||Dingo|
|Travel and Living Expenses for Training (4)||$1,800 - $3,000||As incurred||As incurred during training||Hotels, airlines, restaurants, taxis, rental car agencies|
|Tools and equipment (5)||$500 - $4,500||Varies by supplier||Within 30 days of signing the Franchise Agreement||Suppliers|
|Start-up Advertising and Promotions Package (6)||$2,500||Lump Sum||Prior to completing training||Suppliers|
|Start-up Promotional Materials (7)||$1,600 - $2,600||As incurred||Varied times||Vendors|
|Public Relations Program (8)||$800 - $1,000||Lump Sum||During training||Public relations company|
|Insurance (9)||$900 - $2,000||Varies by insurer||Before opening and as needed||Insurance company|
|Inventory and Supplies (10)||$1,000 - $2,900||As ordered||At time of order||Dingo or Suppliers|
|Vehicle (11)||$0 - $17,000||Monthly fee or lump sum||Varied terms||Auto dealer|
|Additional funds (3 months) (12)||$3,000 - $4,600||As incurred||Varied times||Suppliers, vendors|
|TOTAL (13)||$69,100 - $97,100|
**Excerpt of Item 7 from Bark Busters 2010 FDD**