Under what circumstances is the Baya Bar Development Fee refundable?

According to Baya Bar's 2024 Franchise Disclosure Document, the Development Fee is not refundable under any circumstances. The document states that the Development Fee is fully earned upon signing the Multi-Unit Development Agreement. This means that once the agreement is executed, the fee is considered earned by Baya Bar and will not be returned to the developer, regardless of any subsequent events or decisions.

This non-refundable policy is a significant factor for prospective multi-unit developers to consider. It means that the developer is committing to the full Development Fee upfront with no recourse for a refund. This is regardless of whether they are ultimately able to open all of the Baya Bar locations outlined in the development schedule. The developer should carefully evaluate their financial situation and capabilities before entering into a Multi-Unit Development Agreement with Baya Bar, as the Development Fee represents a sunk cost.

While the Development Fee itself is non-refundable, the agreement does outline how the fee is applied. Specifically, the developer receives credit from the Development Fee to be used towards the Initial Franchise Fee due under each individual Franchise Agreement. For example, the developer receives a $35,000 credit for the first Baya Bar outlet, a $15,000 credit for the second, and a $12,500 credit for each additional outlet. These credits are applied as full or partial payments of the Initial Franchise Fees, offsetting the initial investment required for each location. This structure allows the developer to utilize the Development Fee over time as they open new Baya Bar locations, rather than losing it entirely.