How is the Development Fee calculated for a Beef O Bradys development agreement?
Beef_O_Bradys Franchise · 2025 FDDAnswer from 2025 FDD Document
eement.
4. DEVELOPMENT FEE.
- 4.1 Amount and Consideration. When you sign this Agreement, you agree to pay to us a development fee (the "Development Fee") and to abide by the Development Schedule set forth in Section 3.3(b). The Development Fee is not refundable under any circumstance. The Development Fee you must pay will be equal to half the Franchise Fees afforded to you multiplied by the number of Family Sports Pubs you agree to develop. By way of example, if you are required to develop five Family Sports Pubs under the Development Schedule, the Development Fee will be $31,500 ($12,500 + $8,500 + $5,000 + $3,500 + $2,000). After paying the Development Fee, upon entering into each respective Franchise Agreement for the Family Sports Pubs you agree to develop, you must pay us the remaining half of the applicable reduced Franchise Fee.
- Franchise Fees. In connection with your having entered into this Agreement with us, you are entitled to pay us reduced Franchise Fees starting with the second Family Sports Pub you agree to develop. The reduction in the Franchise Fee will be determined in accordance with the following schedule: (i) $25,000 for the first Family Sports Pub; (ii) $17,000 for the second Family Sports Pub; (iii) $10,000 for the third Family Sports Pub; (iv) $7,000 for the fourth Family Sports Pub; and, (v) $4,000 for the fifth and all subsequent Family Sports Pubs to be developed under this Agreement. This payment schedule will repeat for each subsequent set of five Family Sports Pubs you agree to develop. For each Family Sports Pub developed under this Agreement, you are required to pay us half of the Franchise Fee as part of the Development Fee, as described in Section 4.1, and the other half of the Franchise Fee immediately upon executing the Franchise Agreement for each such Family Sports Pub. The Franchise Fees are non-refundable and are fully earned by us on receipt. By way of example, if you are required to develop five Family Sports Pubs under the Development Schedule then upon entering into your first Franchise Agreement you must pay us a Franchise Fee of $12,5
Source: Item 23 — RECEIPTS. (FDD pages 66–330)
What This Means (2025 FDD)
According to Beef O Bradys' 2025 Franchise Disclosure Document, the Development Fee is determined by the number of Family Sports Pubs the franchisee agrees to develop within a specific Development Area. The Development Fee is calculated as a sum of decreasing amounts for each of the first five locations.
For instance, if a franchisee commits to developing five Family Sports Pubs, the Development Fee is $31,500, calculated as follows: $12,500 for the first pub, $8,500 for the second, $5,000 for the third, $3,500 for the fourth, and $2,000 for the fifth. This payment structure applies to each set of five Family Sports Pubs the franchisee agrees to develop.
In addition to the Development Fee, the franchisee must also pay a reduced Franchise Fee for each location. Half of this reduced Franchise Fee is included in the Development Fee, and the remaining half is due upon signing the Franchise Agreement for each respective Family Sports Pub. For example, when entering the first Franchise Agreement, the franchisee pays $12,500; for the second, $8,500; for the third, $5,000; for the fourth, $3,500; and for the fifth, $2,000. These Franchise Fees are non-refundable and are considered fully earned by Beef O Bradys upon receipt.
This structure incentivizes multi-unit development by reducing fees for subsequent locations. However, franchisees should be aware that these fees are non-refundable, representing a financial commitment to the development schedule outlined in the agreement.