Where in the Beauty Bungalows agreement is the total development fee specified?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
2. Fees
Upon execution of this Agreement, you must pay us a development fee in the amount specified in Appendix A (the "Development Fee"), which is based on the initial franchise fee you must pay for each Franchised Business that you develop (the "Franchise Fee", which is also specified in Appendix A). The Development Fee will be credited towards 100% of the Franchise Fee due under the Franchise Agreement for each Franchised Business that you develop pursuant to this Agreement, including the Initial Franchise
Agreement. The Development Fee is fully earned by us when we and you sign this Agreement and is nonrefundable, even if you do not comply with the Development Schedule.
Based upon the franchisor's financial condition, the Maryland Securities Commissioner has required a financial assurance. Therefore, all initial fees and payments owed by franchisees shall be deferred until the franchisor completes its pre-opening obligations under the franchise agreement. In addition, all development fees and initial payments by area developers shall be deferred until the first franchise under the development agreement opens
Source: Item 23 — RECEIPTS (FDD pages 48–177)
What This Means (2025 FDD)
According to Beauty Bungalows' 2025 Franchise Disclosure Document, the total development fee is specified in Appendix A of the Area Development Agreement, as stated in Section 2 of the agreement. Upon signing the Area Development Agreement, the franchisee is required to pay Beauty Bungalows a development fee. The amount of this fee is detailed in Appendix A and is determined by the initial franchise fee required for each Beauty Bungalows franchised business the franchisee intends to develop.
The development fee serves as a credit towards the franchise fee due under the Franchise Agreement for each Beauty Bungalows location developed under the Area Development Agreement, including the initial franchise agreement. Once the Area Development Agreement is signed by both parties, Beauty Bungalows considers the development fee fully earned and nonrefundable. This means that even if the franchisee fails to meet the development schedule outlined in the agreement, the franchisee will not receive a refund of the development fee.
Prospective Beauty Bungalows franchisees should carefully review Appendix A of the Area Development Agreement to understand the specific development fee amount and the development schedule. They should also consider the nonrefundable nature of the fee and ensure they are prepared to meet the obligations outlined in the development schedule. Additionally, the FDD states that in Maryland, the initial fees and payments are deferred until Beauty Bungalows completes its pre-opening obligations.