What fee must be paid to All States M.E.D. as consideration for the rights granted in the Development Agreement?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
As consideration for the rights granted in this Agreement, you must pay us the Initial Franchise Fee stated in the Franchise Agreement at the time you sign this Agreement for the first territory to be developed under this Agreement and one-half of the Initial Franchise Fee for each subsequent Location to be developed under this Agreement.
The Development Fee is consideration for this Agreement and not consideration for any Franchise Agreement, is fully earned by us upon execution of this Agreement and is non-refundable. The part of the Initial Franchise Fee that is included in the Development Fee is credited against the Initial Franchise Fee payable upon the signing of each individual Franchise Agreement. The balance of the Initial Franchise Fee for the first Location must be paid at the time of execution of this Agreement, together with the execution by you of the Franchise Agreement for the first Location. The balance of the Initial Franchise Fee for each subsequent Location is due upon entering into a Franchise Agreement for each additional Location.
Source: Item 23 — RECEIPTS (FDD pages 44–174)
What This Means (2024 FDD)
According to All States M.E.D.'s 2024 Franchise Disclosure Document, a Development Fee must be paid as consideration for the rights granted in the Area Development Agreement. This fee includes the Initial Franchise Fee stated in the Franchise Agreement for the first territory to be developed. For each subsequent location to be developed under the agreement, the developer must pay one-half of the Initial Franchise Fee.
The Development Fee is deemed fully earned by All States M.E.D. upon the execution of the Area Development Agreement and is non-refundable. However, the portion of the Initial Franchise Fee included in the Development Fee will be credited against the Initial Franchise Fee that is payable when signing each individual Franchise Agreement.
The balance of the Initial Franchise Fee for the first location must be paid when the Area Development Agreement and the Franchise Agreement for the first location are executed. For each subsequent location, the balance of the Initial Franchise Fee is due upon entering into a Franchise Agreement for each additional location. This fee structure is designed to compensate All States M.E.D. for granting the development rights and to ensure the developer's commitment to opening multiple franchise locations within the agreed-upon territory and schedule.