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How Much It Cost to Open Philly Pretzel Factory Franchise

Do you want to open a cookie business by buying Philly Pretzel Factory franchise? If YES, here is how much it cost to open Philly Pretzel Factory franchise successfully. If you are looking towards opening a Philly Pretzel Factory Franchise, it will be nice for you to have a preview of what the company represents before going ahead to enquire about the total cost of opening the franchise in your location.

Philly Pretzel Factory was founded in 1998 and they began franchising in 2004, about 16 years ago. The current CEO is Lee Knowlton and they have their corporate head office at 1525 Ford Rd. Bensalem, PA 19020, USA. As of 2018, the company operates 167 franchises in the United States. The largest region is the Northeast with 134 franchise locations.

Dan DiZio the founder of Philly Pretzel Factory began selling soft pretzels at the age of 11, on a street corner in his hometown of Philadelphia. Philly Pretzel Factory offers hot soft pretzels, pretzel dogs and sausages, cheesesteak-stuffed pretzels, dipping sauces and frozen lemonade. The first Philly Pretzel Factory opened its doors in Mayfair, Philadelphia, PA in 1998.

Financial Investment Required to Open Philly Pretzel Factory Franchise

Here are areas where you are expected to spend money and the costs associated with it;

1. Initial Investment Range: $133,999 to $351,393

2. Franchise Fee: $35,000

3. Royalty Fee: 6 percent of Gross Sales

And the Due Date for this fee is Paid by electronic funds transfer every Friday for the preceding Reporting Period. The amount of the Royalty Fee for any renewal term will be that provided in the Franchise Agreement executed for such renewal term.

Please note that “Gross Revenues” include all revenues generated from the provision of any and all services and/or the sale of any and all products and, whether by the franchisee or a third-party provider, that relate to or arise from the Franchised Business. It does not include taxes collected from customers.

4. Local Advertising Spend, Local Marketing Fund, or Cooperative Advertising Contribution

At least 1 percent per calendar year and the Due Date: for this is Monthly. Please note that each local advertising Cooperative may elect to increase the monthly contribution if approved by a two-thirds majority of the members, and the minimum contribution is subject to adjustment by an amount not to exceed the increase in the CPI.

Centers owned by Philly Pretzel Factory and its affiliates are also members of their respective local Cooperative and each company-owned Center has the same voting rights as the franchised locations within the Cooperative. If the company-owned Centers comprise the majority of a given Cooperative, the maximum and minimum fees for that Cooperative will be consistent with the range stated in this Item 6.

  1. Liquidated Damages Under Area Development Agreement: This fee varies but the Due Date is Payable within 30 days of the termination of the Development Agreement.
  2. Audit Costs: All costs and expenses associated with the audit, reasonable accounting and legal costs.
  3. Indemnity: This fee will vary under the circumstances and the Due Date is As incurred.

Please note that you must reimburse Philly Pretzel Factory if it is held liable for claims arising out of your franchise operations.

  1. Insurance: Reimbursement of costs the franchisor’s out-of-pocket costs.
  2. Equipment, Supply, or Supplier Testing or Inspecting: Fee not to exceed the actual costs of inspecting and testing. (Due Date:  Due on receipt of invoice.)

Please note that This fee covers the cost of testing or inspecting equipment, supplies, or suppliers you propose.

  1. POS Hardware and Software: Depends upon vendor and products purchased. (Due Date:  Depends upon vendor and products purchased.)
  2. Attorneys’ Fees and Costs: Will vary under circumstances. (Due Date:  As incurred.)

Payable to Philly Pretzel Factory if it is forced to retain independent counsel and seek damages or injunctive relief to enforce the Franchise Agreement (whether or not suit is filed) or if Philly Pretzel Factory is required to defend your unsuccessful claim against it.

  1. Veteran Incentives: $1,776 off franchise fee
  2. Term of Agreement and Renewal: The length of the initial franchise term is 10 years. If requirements are met, franchisees can renew for one additional term of 10 years.
  3. Financial Assistance: Philly Pretzel Factory has relationships with third-party sources which offer financing to cover the following: franchise fee, startup costs, equipment, inventory, accounts receivable, and payroll et al.

In Summary,

  • Initial Investment: $366,250 – $790,000
  • Net-worth Requirement $500,000
  • Liquid Cash Requirement: $200,000
  • Ongoing Initial Franchise Fee: $30,000
  • Ongoing Royalty Fee: 6%
  • Ad Royalty Fee: 2%