Definition:
Item 6 in a Franchise Disclosure Document (FDD) lists ongoing or occasional fees that franchisees pay after the business is up and running. Item 5 covers the startup costs separately.
Use It in a Sentence:
Before opening his location, Chris reviewed Item 6 in the Franchise Disclosure Document (FDD) to understand the fees he’d pay while operating his CoolVu business.
Why Is Item 6 Important?
Once you launch your franchise, the bills don’t stop. Item 6 tells you what recurring costs to expect. This can include royalty payments, advertising fees, training fees, or tech system charges.
Knowing these details helps you manage your cash flow. You won’t be caught off guard when monthly or yearly fees come around. You’ll see how often each fee is due and who it goes to—the franchisor or an affiliate.
Some fees stay the same, while others may depend on your sales. That’s why it’s important to read the fine print. Item 6 gives you a clearer picture of your total costs, not just what it takes to open the doors.
CoolVu franchisees value this transparency. It allows you to plan better, ask the right questions, and make informed choices about your investment.
Related FDD Dictionary Terms:
- Franchise Disclosure Document (FDD) – Legal summary
- Item 1 in FDD: Identifies ownership, location, and business ties.
- Item 2 in FDD: Shows leadership experience behind the brand.
- Item 3 in FDD: Lists legal history and potential risks.
- Item 4 in FDD: Discloses past bankruptcies for review.
- Item 5 in FDD: Upfront startup fees listed.
- Item 7 in FDD: Outlines estimated startup and operating costs.
- Item 8 in FDD: Lists supplier rules and product standards.
- Item 9 in FDD: Lists franchisee duties and responsibilities.
- Item 10 in FDD: Explains franchisor financing and loan options.
- Item 11 in FDD: Lists franchisor training, tools, and support.
- Item 12 in FDD: Explains territory rights and restrictions.
- Item 13 in FDD: Lists trademarks and legal protections.
- Item 14 in FDD: Covers patents, copyrights, proprietary info.
- Item 15 in FDD: Explains owner’s operational role.
- Item 16 in FDD: Lists what franchisees can sell.
- Item 17 in FDD: Renewal, transfer, & ending agreements rules.
- Item 18 in FDD: Shows public figures’ roles and ties.
- Item 19 in FDD: Shows sales numbers and earnings data.
- Item 20 in FDD: Tracks openings, closings, and transfers.
- Item 21 in FDD: Shows audited financial statements.
- Item 22 in FDD: Lists all required franchise contracts.
- Item 23 in FDD: Confirms receipt and starts 14-day wait.
