During the build-out of a new Baya Bar location, what minimum fees is the franchisee liable to pay?

According to the 2024 Baya Bar Franchise Disclosure Document, when a franchisee relocates their Baya Bar, they are responsible for certain fees during the build-out phase of the new location. Specifically, the franchisee must continue to pay a minimum Royalty Fee and Brand Fund Contribution. This amount is calculated based on the average amount the franchisee paid during the four calendar quarters immediately before ceasing operations at the original location, or if the business was operating for less than four quarters, the average is calculated over that shorter period.

This means that even while the new location is under construction and not generating revenue, the franchisee is still obligated to remit these ongoing fees to Baya Bar. This obligation continues throughout the build-out, decorating, and furnishing phases of the new location. The agreement specifies that the term of the franchise agreement is not abated during this period, reinforcing the franchisee's financial responsibilities.

This requirement ensures that Baya Bar continues to receive income during the transition period, but it places a financial burden on the franchisee. Franchisees need to factor these ongoing costs into their budget when planning a relocation to avoid cash flow issues. It is also important to note that this obligation is at Baya Bar's discretion, meaning they can enforce this payment or potentially waive it. Franchisees should seek clarity on this policy during the relocation approval process.