When is the initial franchise fee due for a Bang Cookies bakery location?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
Note 1: Initial Franchise Fee – The Initial Franchise Fee for a single franchise under a Franchise Agreement is $55,000.
Note 1: Development Area Fee and Franchise Fees – When you sign a Multi-Unit Development Agreement you must also sign a Franchise Agreement for the first Shop that you will be required to develop under your Multi-Unit Development Agreement. At the time of signing your Multi-Unit Development Agreement, in addition to paying us the Franchise Fee for your first Shop, you will pay to us a Development Area Fee. The amount of the Development Area Fee varies depending on the number of additional Shops, over and above the first Shop authorized by the Franchise Agreement that you will sign with the Multi-Unit Development Agreement, that you will be authorized to develop within the Development Area.
The minimum number of Shops that you may be authorized to develop under a Multi-Unit Development Agreement is three and the maximum number is five. The Development Area Fee is $35,000 for each Shop, over and above the first Shop authorized by the Franchise Agreement that you will sign with your Multi-Unit Development Agreement. You will not be required to pay to us an Initial Franchise Fee at the time of signing the Franchise Agreement for each additional Shop, over and above the Initial Franchise Fee of $55,000 that you will pay at the time of signing the Franchise Agreement for the first Shop in your Development Area and the Development Area Fee that you will pay to us at the time of signing the Multi-Unit Development Agreement.
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 17–24)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, the initial franchise fee for a single franchise is $55,000. For a single-unit franchise agreement, this fee is due when the Franchise Agreement is signed.
For franchisees entering into a Multi-Unit Development Agreement, the timing of the initial franchise fee payment is slightly different. When signing a Multi-Unit Development Agreement, a franchisee must also sign a Franchise Agreement for the first Bang Cookies shop to be developed. At the time of signing the Multi-Unit Development Agreement, the franchisee pays the franchise fee for the first shop, in addition to a Development Area Fee. The Development Area Fee varies, costing $35,000 for each shop beyond the first, with agreements covering 3-5 shops. Franchisees do not have to pay an additional initial franchise fee for each subsequent shop beyond the first.
In summary, the $55,000 initial franchise fee is due upon signing the Franchise Agreement, whether it's a single-unit agreement or part of a Multi-Unit Development Agreement. In the case of a Multi-Unit Development Agreement, this payment coincides with the signing of the development agreement and the payment of the Development Area Fee.