What is the initial franchise fee for a second Baya Bar Shop?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
FEES**
Franchise Agreement: You must pay us an initial franchise fee of $35,000 for the right to establish a single Baya Bar Shop under a Franchise Agreement. This fee is used in part for working capital and in part for profit. If you are purchasing your second Shop, the initial franchise fee will be reduced to $30,000, and if you are purchasing your third or later Shop, the initial franchise fee will be reduced to $25,000. The initial franchise fee is imposed
Source: Item 5 — INITIAL FEES (FDD pages 10–11)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, the initial franchise fee for the first shop is $35,000. However, if a franchisee purchases a second Baya Bar shop, the initial franchise fee is reduced to $30,000. For franchisees purchasing their third or any subsequent shop, the initial franchise fee is further reduced to $25,000. This fee is applied uniformly to all franchisees.
Baya Bar uses the initial franchise fee for working capital and profit. The initial franchise fee is generally non-refundable, but there are limited circumstances where a refund may be available. If the franchisor terminates the Franchise Agreement because the franchisee fails to complete the pre-opening training program satisfactorily, or if the franchisor concludes that the franchisee cannot satisfactorily operate the franchised business, a refund of the initial franchise fee may be issued, less any out-of-pocket costs incurred by Baya Bar. To receive a refund, the franchisee must sign required documents, including a confidentiality agreement and general release.
For franchisees considering a multi-unit development agreement, the initial fees work differently. The development fee is 100% of the initial franchise fee for the first shop, plus 50% of the reduced initial franchise fee for each additional shop. For example, committing to three shops would result in a development fee of $62,500, calculated as $35,000 + (50% of $30,000) + (50% of $25,000). This development fee is non-refundable and is earned when received by Baya Bar.