When is the initial franchise fee due for a Benjamin Franklin Plumbing franchise?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
You are required to pay us a non-refundable initial franchise fee in the amount shown in the Data Sheet.
The initial franchise fee is due when you sign this Agreement.
Franchisor and Franchisee are entering into a Promissory Note for the entirety of the Franchise Fee and any applicable Additional Population Fee, less the $5,000 down payment ("Conversion Down Payment") payable in a lump sum contemporaneously with this Addendum and the Franchise Agreement.
The payment obligation for the Franchise Fee and any applicable Additional Population Fee, less the Conversion Down Payment, is hereby deferred until the fifth (5th) anniversary of the Agreement Date, subject to the terms of the Note and in accordance with the chart below.
Franchisor agrees to waive certain amounts due under the Note, up to the entirety of the Note Amount, provided Franchisee's Gross Revenue in the fifth (5th) year of operation following the Agreement Date exceeds the pre-conversion gross revenue of the Existing Plumbing Business by certain thresholds. Such pre-conversion gross revenue shall be determined by the prior year's P&L or prior year tax return for the converting Plumbing business, as described in the table below.
Source: Item 23 — RECEIPTS (FDD pages 88–312)
What This Means (2025 FDD)
According to the 2025 Benjamin Franklin Plumbing Franchise Disclosure Document, the initial franchise fee is generally due when the Franchise Agreement is signed. However, the FDD also describes a Conversion Incentive Program addendum that modifies the standard payment terms for franchisees converting an existing plumbing business.
Under this program, instead of paying the full franchise fee upfront, the franchisee is only required to make a $5,000 down payment (Conversion Down Payment) contemporaneously with the addendum and the Franchise Agreement. The remaining balance of the franchise fee and any applicable Additional Population Fee is then deferred until the fifth anniversary of the agreement date. This deferred payment is formalized through a Promissory Note between the franchisee and Benjamin Franklin Plumbing.
This Conversion Incentive Program offers a significant financial benefit to franchisees converting existing plumbing businesses, as it reduces the initial capital outlay required to join the Benjamin Franklin Plumbing franchise system. However, the franchisee is still obligated to pay the deferred balance, plus interest, as outlined in the Promissory Note.
Furthermore, the agreement includes a potential waiver of the deferred amount if the franchisee's gross revenue in the fifth year of operation exceeds the pre-conversion gross revenue of the existing plumbing business by certain thresholds. This provides an incentive for the franchisee to grow their business and potentially avoid paying the deferred franchise fee altogether. The specific thresholds and conditions for this waiver would be detailed in the table mentioned in the excerpt.