What is the initial franchise fee for each Bevaris Alliance franchise after the second?
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)
According to the 2024 Bevaris Alliance FDD, the initial franchise fee is $5,000 for the first franchise, $3,750 for the second franchise, and $2,500 for each franchise thereafter. This fee is recognized when Bevaris Alliance has substantially performed its obligations under the franchise agreement, which occurs when the franchisee begins operating their business.
For a prospective Bevaris Alliance franchisee, this tiered fee structure offers a potential discount for those interested in opening multiple locations. The initial investment is higher for the first two franchises, but subsequent franchises come at a reduced cost. This could incentivize existing franchisees to expand their operations within the Bevaris Alliance system.
The obligations that Bevaris Alliance must fulfill before recognizing the fee include site selection, providing operations manuals and marketing plans, maintaining a company-sponsored internet site, and providing initial training. These services are essential for helping the franchisee commence operations and are treated as a single performance obligation by Bevaris Alliance. Therefore, the franchisee can expect these services to be completed before the franchise fee is fully recognized by Bevaris Alliance.