What is the 'Successor Agreement Fee' that a Baya Bar franchisee must pay?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
on the date that is ten (10) years following the Opening Date, as defined in Section 8 hereof (the "Term").
- 5. SUCCESSOR OPTIONS. Subject to the terms and conditions of this Agreement, Franchisee shall have the right, following the expiration of the Term hereof, to enter into a new franchise agreement and other agreements then customarily employed by Franchisor
and in the form then generally being offered to prospective franchisees in the state in which the Territory is located (the "Successor Franchise Agreement") for two (2) additional terms of five (5) years. The term of each such Successor Franchise Agreement shall commence upon the date of expi
Source: Item 22 — CONTRACTS (FDD page 56)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, franchisees have the option to enter into a new franchise agreement upon the expiration of their initial term. This new agreement is called a 'Successor Franchise Agreement,' and it is subject to the terms and conditions outlined in the current agreement.
To obtain a Successor Franchise Agreement, a Baya Bar franchisee must pay a 'Successor Agreement Fee' of $3,500.00 per term. Each successor term is for five years, and franchisees have the option to renew for two additional terms.
This fee is charged for each five-year renewal term. Therefore, if a franchisee chooses to renew for both available terms, they would pay the $3,500 fee twice, once for each renewal. This fee is in addition to any other requirements or conditions that Baya Bar may impose for granting a Successor Franchise Agreement, such as completing additional training or remodeling the franchise location.