To whom is the initial franchise fee for Baya Bar paid?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
YOUR ESTIMATED INITIAL INVESTMENT
| (1) | (2) | (3) | (4) | (5) |
|---|---|---|---|---|
| Type of Expenditure | Amount | Method of Payment | When Due | To Whom Payment is to be Made |
| Initial Franchise Fee (1) | $35,000 | Lump Sum | When Franchise Agreement Signed | Us |
| 3 Months (2) | $6,500 | As arranged | As arranged | La |
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 initial franchise fee is paid to "Us", meaning the franchisor. The initial franchise fee is $35,000 and is paid in a lump sum when the Franchise Agreement is signed.
For a Multi-Unit Developer, the development fee is also paid to "Us", meaning the franchisor. The development fee is $62,500, paid in a lump sum when the Multi-Unit Development Agreement is signed. This fee covers the development of three Baya Bar shops.
Understanding where your initial investment goes is crucial for prospective franchisees. In the case of Baya Bar, the initial franchise fee and development fee are paid directly to the franchisor, which is a fairly standard practice in franchising. This contrasts with other expenses like rent, utilities, and inventory, which are paid to third parties such as landlords, utility companies, and suppliers.