27 Substantial Fees Every Urban Air Trampoline Park Franchisee Needs to Know | Franchise Chatter

0
65


Urban Air Trampoline Park

If you are considering an Urban Air Adventure Park franchise, don’t get blindsided by these 27 important franchise fees (from the initial franchise fee, to the royalty fee, to 25 other fees found in Items 5 and 6 of Urban Air Adventure Park’s 2020 FDD).

1.  Initial Franchise Fee:  $75,000

  • When you sign a Franchise Agreement, you will pay Urban Air a $75,000 initial franchise fee. Except for the differences described below, the initial franchise fee is uniform for all franchisees. The initial franchise fee is nonrefundable upon payment.
  • Urban Air offers a 10% discount off the initial franchise fee for active duty United States military and United States veterans that were honorably discharged. The Franchised Business must be operated under a business entity, and the active duty personnel or veteran participant must maintain at least a 51% ownership interest in such entity.

2.  Purchase and Installation Agreement:  deposit of 70% of the purchase price for the Attractions package, including installation, tax, insurance, and shipping costs; balance due upon shipment and delivery of the Attractions

  • In connection with the signing of the Purchase and Installation Agreement, you will pay to UA Attractions a deposit based upon the Attractions you purchase (70% of the purchase price for the Attractions package, including installation, tax, insurance, and shipping costs) and pay the remaining balance due under the Purchase and Installation Agreement upon shipment and delivery of the Attractions.

3.  Royalty Fee:  7% of Gross Sales

Franchises Ranked by Average Revenues and Profits
  • Due Date:  Monthly on the 15th of the month beginning on the established “Opening Date” (the date on which your Adventure Park opens for business to the public)

4.  NAF Fee:  5% of monthly Gross Sales attributable to membership fees received for membership agreements purchased for access to and use of your Franchised Business

  • Due Date:  Monthly on the 15th of the month beginning on the established Opening Date.
  • Urban Air reserves the right to suspend collection of the NAF Fee or increase the NAF Fee at any time; provided, if the NAF Fee is increased, the sum of the NAF Fee and Local Marketing Expenditure (described below) will not exceed 6% of Gross Sales (as allocated by Urban Air between the NAF Fee and the Local Marketing Expenditure) during any 12-month period.

5.  Local Marketing Expenditure:  5% of monthly Gross Sales

  • Due Date:  Monthly upon invoice.
  • Urban Air may modify the Local Marketing Expenditure periodically by providing you at least 30 days’ notice; however, the Local Marketing Expenditure combined with the NAF Fee will not exceed 6% of Gross Sales (as allocated by Urban Air between the Local Marketing Expenditure and the NAF Fee) during any 12-month period.

6.  Grand Opening Advertising Amount:  between $30,000 and $50,000

  • Payable to the supplier providing the services, which may be Urban Air.

7.  Advertising Cooperative (if established):  amount determined by majority vote of cooperative members

  • Contributions to the Advertising Cooperative will be credited toward your Local Marketing Expenditure.

8.  Training:  reasonable fee (currently, $500 per day), plus reimbursement of Urban Air’s actual costs

Franchise Matching Quiz
  • Due Date:  Upon invoice.

9.  Compliance Review Fee:  actual cost of program, including cost of food, beverage, or merchandise purchased as part of the mystery shop or audit

  • Due Date:  Upon invoice.
  • Payable if Urban Air implements a mystery shop, audit, customer satisfaction, or similar program.

10.  POS License:  initial set-up fee of $3,000, plus monthly subscription fee of $1,600-$1,800

  • Due Date:  Monthly upon invoice.
  • Urban Air reserves the right to collect the fees payable to the approved supplier of POS services that Urban Air designates and pays such collected fees to the approved supplier directly.

11.  Music Provider:  varies depending on programming selected and number of licenses required at your Adventure Park (currently, $600-$1,100 annually)

  • Due Date:  Monthly upon invoice.
  • Urban Air collects this license fee on behalf of Urban Air’s designated music provider and pays such collected license fees to the music provider directly.

12.  Online Training:  $500 annually

  • Urban Air collects this fee on behalf of the licensor of the online training software and pays such collected fees directly to the licensor.

13.  Alternate Supplier Product Testing Fee:  reimbursement of Urban Air’s costs incurred in product testing and/or evaluating suppliers

Franchise Chatter Is Your Unbiased Franchise Comparison Tool
  • Due Date:  Upon invoice.
  • Payable only if you request to purchase products from an alternative supplier or request to use an alternate product.

14.  Renewal Fee:  50% of Urban Air’s then-current initial franchise fee, plus reimbursement of Urban Air’s legal and professional expenses and its other costs incurred in connection with the renewal

  • Due Date:  Upon invoice.
  • Payable only if you exercise your successor term option and satisfy conditions for a successor term.

15.  Relocation Fee:  25% of Urban Air’s then-current initial franchise fee

  • Due Date:  Upon invoice.
  • Payable prior to relocation only if you request and Urban Air approves your relocation.

16.  Transfer Fee:  50% of Urban Air’s then-current initial franchise fee if transferred to a new approved franchisee or 25% of Urban Air’s then-current initial franchise fee if transferred to an approved existing franchisee, plus reimbursement of Urban Air’s legal and professional expenses and its other costs incurred in connection with the transfer

  • Due Date:  Upon invoice.
  • Payable before transfer of your Franchised Business if you request and Urban Air consents to transfer.
  • No charge if the transfer of your Franchised Business does not result in a change in control of the franchisee entity.

17.  Resale Program Fee:  greater of 4% of the purchase price paid for your Franchised Business (in any form, including cash, credit, debt, or stock) and $75,000

  • Due Date:  Prior to closing.
  • Payable if you elect to participate in Urban Air’s Resale Program in connection with the sale of your Franchised Business to an approved transferee of the Franchise Agreement.

18.  Interest:  18% per year or maximum lawful rate

  • Interest is charged when any Royalty Fee or other fee or payment due to Urban Air is not paid when due or an audit reveals underpayment based on inaccurate Gross Sales.
  • The maximum interest rate allowed by law in California is 10% annually.

19.  Nonsufficient Funds Fee:  $100 per occurrence, not to exceed maximum allowed by applicable law

  • Payable only if there are insufficient funds in the account designated by you for ACH debit to satisfy fees and amounts owed to Urban Air under the Franchise Agreement when due.

20.  Audit Costs:  reasonable cost of audit

  • Due Date:  Upon invoice.
  • Payable if the audit is made necessary by your failure to provide reports or supporting records as required, or provide those reports, records, or information on a timely basis, or if an understatement of Gross Sales for the period of any audit is determined to be greater than 2%.

21.  Indemnification:  varies depending upon claim and resolution of claim

22.  Liquidated Damages

23.  Public Offering or Private Placement of Your Securities:  reimbursement of Urban Air’s actual costs and expenses incurred in having its legal and professional counsel review offering materials

  • Payable only if you offer your securities in a public or private offering.

24.  Call Center Fee:  varies; Urban Air will charge you the pro rata share of the cost of operating, administering, and upgrading the call center, which includes certain fees that Urban Air collects and pays to its Designated Suppliers on your behalf. Currently, the base fee is $350-$400 per month per Adventure Park.

  • Due Date:  Monthly on the 15th of the month following performance or sale beginning on the established Opening Date.

25.  Technology Fee:  0.25% of Gross Sales

  • Payable if Urban Air implements a fee for providing basic troubleshooting support to franchisees for certain technology system components used in the operation of the Adventure Park.

26.  Membership Program Fee:  2.5% of monthly Gross Sales attributable to membership fees received by Urban Air for membership agreements purchased for access to and use of your Franchised Business, plus your pro rata share of costs incurred in connection with operating the Program

27.  Payment Processing Fee:  varies depending upon the volume of payments made by credit card at your Adventure Park

Franchise Matching Quiz



learn more

LEAVE A REPLY

Please enter your comment!
Please enter your name here