Considering a Molly Maid Franchise? Don't Overlook These 24 Important Franchise Fees
June 21, 2017 by Franchise Chatter Leave a Comment
in Franchise Fees, Maid Franchise
Updated May 15, 2018.
If you are considering a Molly Maid franchise, don't get blindsided by these 24 important franchise fees (from the initial franchise fee, to the royalty fee, to 22 other fees found in Items 5 and 6 of Molly Maid's 2018 FDD).
1. Initial Fees: Initial Franchise Fee of $14,900; Initial Package Fee of $10,000: Territory Fee of $1 per Target Household Value in your Territory
Upon signing of the Franchise Agreement, you must pay Molly Maid the following initial fees (the "Initial Fees"):
(1) An initial franchise fee of $14,900 (the "Initial Franchise Fee");
(2) A fee of $10,000 (the "Initial Package Fee") for Molly Maids' initial package (the "Initial Package") that includes initial licenses for its Software System (currently including Customer Care Software CLEO, Lead Management System, Bookkeeping Software, and the Molly Maid Teamsite), as well as the cost of certain operating equipment (which equipment may include a computer, monitor, printer, marketing supplies and collateral, and uniforms), and a $1,000 convention allowance (the "Convention Allowance"); and
(3) A territory fee equal to $1 per Target Household Value ("THV") in your Territory (the "Territory Fee"), as described in Item 12, which meets Molly Maid's then-current demographic formulation, which may vary based on the demographic information, including, for example, urban and rural market conditions. Territory Fees typically range from $45,000 to $65,000 for a standard-size market and $20,000 to $30,000 for a mid-size market.
2. Software System Fees
You must pay to Molly Maid, or its designee (ZorWare), a fee for use of its Software System (currently including Customer Care Software CLEO, Lead Management System, Bookkeeping Software, and the Molly Maid Teamsite).
The enrollment fee is included in the Initial Package Fee of $10,000, which is collected via automatic bank draft from your bank account, at the signing of the Franchise Agreement. The Initial Package includes initial license fees for Molly Maid's Software System.
3. License Fee: 3 to 6 ½% of Gross Sales, except for "roll-in" sales. In addition, minimum license fees apply.
Due Date: Due by automatic debit each Friday.
For the use of the Marks, System, Territory, and Manuals.
4. MAP Contribution: the then-current fee is $450 per month per Molly Maid Franchise Agreement that you have entered into with Molly Maid, except that if you have entered into more than two Franchise Agreements with Molly Maid, you may only be required to pay the monthly MAP Contribution under two Franchise Agreements. In no event shall your total MAP Contribution exceed 2% of the total monthly Gross Sales for each of your Molly Maid franchises. The amount of the MAP Contribution is determined by a vote of the franchise system, as often as every two years.
Due Date: Due by automatic debit by the 15th day of each month.
5. Local Marketing Requirement: $1 per THV per year, which declines as Gross Sales increase, to a minimum of $0.15 per THV if criteria are met
Due Date: Payable per supplier's terms.
Including, but not limited to, local pay-per-click, Internet media, print media, promotional handouts, door hangers, review surveys, recruitment advertising, and vehicle decals.
6. Internet Connection and Anti-Virus Software: the then-current fee. The current fee is $89-159 per month for 1 account/user on 1 computer.
Payable to a third party.
To be operable before you attend initial training.
7. Software System Fees: $50 per week for the initial term of the Franchise Agreement; optional Listen 360 fees: $20 per month for the initial term of the Franchise Agreement
Due Date: Paid weekly via credit card or automatic bank draft.
You must use the Software System (currently including Customer Care Software CLEO, Lead Management System, Bookkeeping Software, and the Molly Maid Teamsite).
Fee is paid to Molly Maid or its affiliate ZorWare, as applicable.
These weekly support and maintenance fees may change in the future.
Molly Maid may change the Software System from time to time.
8. Call Center Service Fees: the then-current fees. The current fees include a set-up fee of $99, a monthly fee of $0-$200 depending on services selected, plus $20-$25 per booked clean or estimate.
During the hours of operation of the Call Center, either a live person in your office must answer all sales calls, or they must roll over to the Call Center.
9. Reunion, Conventions, Regional Meetings and Additional Training: the then-current fee. The current registration fee is $300-$475 per person. Franchisees who do not attend one convention every two years may be charged up to $1,000 for failure to attend.
Due Date: Before the start of the event.
Meeting room space, some meals, audio visual rental, workbooks, speakers, etc.
Does not include travel, lodging, or all meals.
10. Renewal Fee: $4,000 (or $2,000 if an e-renewal)
Due Date: When you sign your Renewal Franchise Agreement.
11. Transfer: $9,900 if the transfer is to a new franchise owner; $2,000 if the transfer is to an existing Molly Maid franchise owner; or $500 if the transfer is to your immediate family member. If you authorize Molly Maid to enlist a third party broker to locate the transferee, you must pay Molly Maid the then-current broker fee. All outstanding fees due prior to transfer. Transferee must pay $6,000 for Molly Maid's transfer initial package.
Due Date: The transfer fee and the transfer initial package fee are due with the Franchise Agreement.
The transfer initial package fee may be reduced to $3,200 if the transferee acquires from the transferor a computer that is two years old or less and meets Molly Maid's specifications, in which case such item will be removed from the Transfer Initial Package received by the transferee.
12. Change of Legal Entity Fee: $500
Due Date: Upon signing transfer documents.
Due if you change the legal entity that owns the Business more than once.
There is no transfer fee for an initial transfer from an individual franchisee to an entity established solely for convenience of ownership and operation of the Business.
13. Failure to Maintain Insurance: Molly Maid's actual cost for insurance premiums and a reasonable fee for the expenses Molly Maid incurs
Due Date: On demand.
If you fail to maintain the required insurance coverage on your franchise, Molly Maid may acquire and pay for the insurance coverage and charge you.
14. Interest: 12% per annum or the maximum permitted by law on unpaid balances
The 12% charge is calculated at a per annum rate but may be collected on demand, including weekly or monthly through automatic bank draft.
15. Late Fees: $10 per day
Applies to overdue fees from the due date until all sums are paid.
16. Audit: cost of audit plus expenses, plus any amount owed as shown by the audit, plus interest and late fees
Due Date: When you are billed.
Payable only if Molly Maid finds an understatement of Gross Sales of 2% or more or if you fail to provide requested information within 30 days of Molly Maid's request.
17. Indemnification and Attorneys' Fees and Costs: varies according to loss
If Molly Maid must engage an attorney to enforce its rights under the Franchise Agreement and it prevails, or if it is sued because of something you do or fail to do, you must indemnify Molly Maid and/or reimburse it for all costs, including reasonable attorneys' fees (which may include outside counsel fees and in-house legal costs charged at rates comparable to outside attorneys), interest, court costs and expenses expended or incurred in enforcing its rights.
18. Territory Violation: will vary depending on the type and severity of the violation
Due Date: As incurred.
Only due if you service customers in a neighboring franchisee's territory without prior written consent.
19. Amendment Fee: $250
You must pay Molly Maid a processing fee for modifications to your Franchise Agreement that are made at your request.
When you request an amendment to your Franchise Agreement or related agreements, Molly Maid may require that you sign a general release releasing it from all claims you may have, except claims which, under state law, may not be released.
20. Unapproved Suppliers: Molly Maid's actual out-of-pocket costs of inspection or testing
21. Tax Reimbursement: varies according to tax
You must pay Molly Maid or to taxing authorities (as applicable) an amount equal to any sales tax, use tax, gross receipts tax, documentary stamp tax, or similar tax (other than income tax), fees, or charges imposed on Molly Maid due to any required payments you make to Molly Maid.
You must pay Molly Maid such additional amounts as necessary so that Molly Maid receives all payments from you in full as if no such tax applied.
22. Dishonored Check or ACH Draft: $25
You must pay Molly Maid for each check returned or ACH draft refused by your financial institution for insufficient funds in your account.
23. Additional Training Fee: the then-current fee; currently up to $100 an hour per attendee
Due Date: On hiring.
If you request training in addition to the initial training program, Molly Maid may charge you a training fee, plus you must pay your costs and expenses in connection with such training.
24. Key Accounts/Management Fee: up to 3% of total Gross Sales related to Key Account work, including Gross Sales that relate to Key Accounts; Gross Sales that are the result of any lead or any agreement developed by Molly Maid's Business Development Department or any similar group that is part of the company or its designee; Gross Sales for work that is dispatched from any call center operated by Molly Maid or its designee; Gross Sales that are audited by Molly Maid or its designee according to Key Accounts standards; or Gross Sales that otherwise benefit from Molly Maid's Key Accounts activities or management
Due Date: When you are billed or when the fee is deducted from your payment(s) for work performed or added to the invoice.
If you participate in Molly Maids' Key Accounts program, it reserves the right to require you to pay a Key Accounts/Management Fee to it or its designee.
Molly Maid may also sometimes refer to this fee as a "Key Accounts Management fee" or "Management fee."
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