To whom do I pay the initial franchise fee 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.
| Type of Expenditure | Amount | Method of Payment | When Due |
|---|---|---|---|
| To Whom Payment is Made | |||
| Development Area Fee (Note 1) | $70,000- $140,000 | Lump sum | When Franchise Agreement and Multi- Unit Development Agreement are signed |
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 of $55,000 is paid to Bang Cookies when signing the Franchise Agreement. This fee grants you the right to operate a single Bang Cookies franchise.
For franchisees considering a Multi-Unit Development Agreement, which allows for the development of multiple Bang Cookies shops, the payment structure is slightly different. In addition to the initial franchise fee for the first shop, a Development Area Fee is also paid to Bang Cookies upon signing the Multi-Unit Development Agreement. This Development Area Fee ranges from $70,000 to $140,000, depending on the number of additional shops (between three and five) the franchisee is authorized to develop.
It's important to note that while the initial franchise fee is required for the first shop under the Multi-Unit Development Agreement, franchisees are not required to pay an additional initial franchise fee for each subsequent shop they develop within the designated area. This structure incentivizes multi-unit development by reducing the upfront costs for expanding the Bang Cookies brand within a specific territory.