What costs does Bevaris Alliance cover for the initial training program?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
States of America.
Cash consists of cash and money market funds which are considered to be cash or cash equivalents.
Deferred Franchise Development Costs. Costs incurred in connection with the development of the franchise concept, offering documents and operations manuals have been deferred. The costs are being amortized using the straight-line method over the 5-year estimated useful life of the asset. Such amortization will begin when franchise sales commence.
Initial franchise fees and royalties. Initial franchise fee is recognized when the obligations required by the franchise agreement has been substantially performed by the Company which is when the franchisee begins operating the franchised business. Initial franchise fees is $5,000 for the first franchise, $3,750 for the second franchise and $
Source: Item 23 — RECEIPT (FDD pages 22–88)
What This Means (2024 FDD)
Based on the 2024 Bevaris Alliance Franchise Disclosure Document, the initial franchise fee covers several obligations by Bevaris Alliance to the franchisee. These obligations include site selection, provision of operations manuals, marketing plans, a company-sponsored internet site, initial training, and other services necessary for the franchisee to commence operations.
In essence, the cost of the initial training program is included within the initial franchise fee. For the first franchise, the initial franchise fee is $5,000. For the second franchise, it is $3,750, and for each franchise thereafter, it is $2,500. Bevaris Alliance considers these pre-opening services as a single performance obligation.
However, the FDD does not specify which particular expenses related to the initial training program are covered by Bevaris Alliance. It remains unclear whether the initial franchise fee covers costs such as travel, lodging, meals, and wages for the franchisee and their staff during the training period. A prospective franchisee should seek clarification from Bevaris Alliance regarding the specific costs associated with the initial training program that are covered, and those that are the franchisee's responsibility.