What is the development fee for a Baya Bar multi-unit development agreement?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
| (1) Type of Expenditure | (2) Amount | (3) Method of Payment | (4) When Due | (5) To Whom Payment is to be Made |
|---|---|---|---|---|
| Development Fee (1) | $62,500 | Lump Sum | On signing Multi-Unit Development Agreement | Us |
| Other Expenditures | $174,415 to $435,400 | See First Table | See First Table | See First Table |
| for First Shop(2) | ||||
| Total | $226,915 to $487,900 |
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- Development Fee. This fee is discussed in Item 5. Our estimate assumes you will develop three Shops. If you choose to develop additional Shops, your development fee will increase by $7,500 for each additional Shop you commit to develop after the third.
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- Other Expenditures for First Shop. These are the estimates to build-out your first Shop. Costs associated with building out additional Shops are subject to factors that we cannot estimate or control, such as inflation, increased labor costs or increased materials costs.
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 16–20)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, the development fee for a multi-unit development agreement is $62,500. This fee is paid in a lump sum when signing the Multi-Unit Development Agreement and is paid directly to Baya Bar. The FDD notes that this estimate assumes you will develop three shops. If you choose to develop additional shops, your development fee will increase by $7,500 for each additional shop you commit to develop after the third.
In addition to the development fee, the estimated initial investment for a multi-unit developer for the first shop ranges from $174,415 to $435,400. This brings the total estimated initial investment to between $226,915 and $487,900. These other expenditures for the first shop are estimates to build out your first shop. The costs associated with building out additional shops are subject to factors that Baya Bar cannot estimate or control, such as inflation, increased labor costs, or increased materials costs.
Prospective franchisees should carefully consider these costs and the factors that could influence them, especially when planning for multiple locations. Understanding the potential for increased costs in subsequent build-outs is crucial for financial planning and risk assessment. It is also important to note that the development fee is non-refundable, so prospective franchisees should conduct thorough due diligence before signing the agreement.