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How Much Does It Cost to Open Watermill Express Franchise?

If you are looking towards opening a Watermill Express 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. Watermill Express was founded in 1984 and they began franchising in 1994, about 26 years ago. The current CEO of the company is Lani Dolifka and they have their corporate head office at 177 W. Jessup St. Brighton, CO 80601, USA.

As of the 2016 Franchise Disclosure Document, there are 313 franchised Watermill Express locations in the USA. Watermill Express has franchise locations in 5 states. The largest region is the West with 213 franchise locations. In the mid 1980’s Lani and Don Dolifka were living near a Superfund site and their drinking water was declared unsafe. They responded along with friends and family, by creating a multi-barrier water purification system that converted existing tap water into drinking water of exceptional purity.

They promoted the concept of refilling your own container which helped reduce single-use plastic pollution and save money. Today the company has nearly 1,300 locations and now offers Waterocks Ice at select locations nationwide. Watermill Express is the largest drive-up pure drinking water company and the green alternative to prepackaged water in the United States.

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

  1. Initial Investment Range: $467,650 to $631,200
  2. Franchise Fee: $25,000
  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.

  1. 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 Watermill Express 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 Watermill Express 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 Watermill Express 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 Watermill Express is required to defend your unsuccessful claim against it.

  1. Veteran Incentives: $1,000 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: Watermill Express 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: $467,650 – $631,200
  • Net-worth Requirement: $500,000 – $1,000,000
  • Ongoing Initial Franchise Fee: $25,000
  • Ongoing Royalty Fee: to 7%
  • Ad Royalty Fee: to 2%