What is the initial franchise fee for an All States M.E.D. franchise?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
itial Franchise Fee
You must pay us, upon signing the franchise agreement, a $100,000 initial franchise fee ("Initial Franchise Fee").
Area Development Program
If you sign an Area Development Agreement ("ADA") and become an area developer, you will pay us the Initial Franchise Fee of $100,000 for your first franchise and a development fee ("Development Fee") based on the number of Businesses to be developed. The number of Businesses required by the Development Schedule will be determined by a number of factors, such as the size of the Development Area, the population of the Development Area, and your financial capacity and expertise in developing businesses. The Development Fee for each Business that you develop will be $50,000. You will be required to sign our then-current Franchise Agreement for each Business. The Development Fee is paid in a lump sum at the time the ADA is signed, is uniform to all developers currently acquiring development rights, is not refundable and will not be credited against any other fees paid to us or our affiliates. The Development Fee for 3-5 outlets is $200,000 - $300,000.
Refundability of Initial Fees.
The initial fees discussed above are uniformly imposed, are fully earned when the franchise agreement is signed, and are non-refundable.
Source: Item 5 — INITIAL FEES (FDD pages 11–12)
What This Means (2024 FDD)
According to All States M.E.D.'s 2024 Franchise Disclosure Document, the initial franchise fee is $100,000. This fee is due upon signing the franchise agreement. The FDD specifies that this fee is uniformly imposed, fully earned upon signing, and is non-refundable.
For those interested in developing multiple locations through an Area Development Agreement (ADA), the initial franchise fee of $100,000 covers the first franchise. In addition to this, a development fee is required, which varies based on the number of businesses to be developed. For each subsequent business developed under the ADA, the development fee is $50,000. The total Area Development Fee for 3-5 outlets ranges from $200,000 to $300,000, which includes the initial franchise fee for the first territory and half of the initial franchise fee for additional territories.
Prospective franchisees should note that the Area Development Fee is paid in a lump sum when the ADA is signed. This fee is uniform for all developers currently acquiring development rights and is not refundable, nor will it be credited against any other fees. Franchisees are also required to sign the then-current Franchise Agreement for each business they develop. The remaining half of the initial franchise fee for additional territories is due when entering into Franchise Agreements for those territories.
This structure means that franchisees committing to multiple locations upfront through an ADA will have a different initial payment structure compared to those acquiring a single franchise. The initial investment for an ADA, including the development fee, can be significantly higher, but it secures the rights to develop multiple territories. It is crucial for potential franchisees to carefully consider their development plans and financial capacity before deciding between a single franchise agreement and an area development agreement.