What is the formula for calculating the renewal fee for a Better Blend franchise agreement?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| 50% of the then- | Payable if you enter into a successor | ||
| current franchise fee, | franchise agreement at the end of your | ||
| but not less than | agreement term. | ||
| $17,500 |
Source: Item 6 — OTHER FEES (FDD pages 11–15)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, the renewal fee for a successor franchise agreement is 50% of the then-current franchise fee, but not less than $17,500. This means that if a franchisee chooses to renew their agreement at the end of the initial term, they will need to pay a renewal fee that is calculated based on the current franchise fee at the time of renewal.
For a prospective Better Blend franchisee, this indicates that the cost to renew the franchise agreement will depend on what the initial franchise fee is at the time of renewal. While the renewal fee is calculated as half of the then-current franchise fee, the franchisee will be required to pay at least $17,500.
It is important to note that the renewal fee could be higher than $17,500 if 50% of the then-current franchise fee exceeds that amount. This is a fairly standard practice in franchising, as it allows the franchisor to adjust the renewal fee based on the current market conditions and the value of the franchise system. Franchisees should factor this potential cost into their long-term financial planning.