What is the relationship between the initial franchise fee for Beard Papas in Item 5 and the construction/leasehold improvement costs in Item 7?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
| Amount | Method of Payment | When Due | To Whom Payment is Made | |
|---|---|---|---|---|
| Initial Franchise Fee | $45,000 | Lump sum | When Franchise | Us |
| (Note 1) | Agreement is signed | |||
| Construction and | $35,000 – $150,000 | As arranged | As incurred | Contractors, |
| Leasehold | suppliers, and/or | |||
| Improvements (Note 2) | landlord |
What This Means (2025 FDD)
According to Beard Papas's 2025 Franchise Disclosure Document, the initial franchise fee and construction/leasehold improvement costs are separate components of the total initial investment. The initial franchise fee for a single Beard Papas Kiosk or Stand-Alone Shop is $45,000, payable in a lump sum when the Franchise Agreement is signed. This fee is paid directly to Beard Papas. It is non-refundable, and Beard Papas does not finance any portion of it.
Construction and leasehold improvements, on the other hand, are estimated to cost between $35,000 and $150,000 for a Kiosk Shop. These costs cover the construction, construction management, and build-out of the shop, but do not include furniture, fixtures, and equipment. The estimate assumes the location has pre-existing essential interior improvements. These payments are made to contractors, suppliers, and/or the landlord as the costs are incurred.
For a Multi-Unit Development Agreement, the initial franchise fee is discounted to $33,200 or $29,900 depending on the number of shops (3-4 or 5-10 respectively) authorized for development. In this case, a Development Area Fee is also required for each additional shop. Note 2 in Item 7 indicates that the estimated initial investment for developing a Beard Papa's Shop under a Franchise Agreement, as reflected in Tables A and B, excludes the initial franchise fee of $45,000. This means the construction and leasehold improvement costs are part of the overall initial investment, but the initial franchise fee is accounted for separately in the tables.