If a franchise broker is owed a commission for introducing an existing franchisee to Bft, and the franchisee acquires a single additional franchise, what is the sourcing fee?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
d to the broker, in lieu of the Initial Franchise Fee.
Additionally, if you are an existing franchisee and a franchise broker is owed a commission in connection with the purchase of your additional franchise(s) and/or Development Rights under a Multi-Unit Agreement based on a previously-made introduction to us or our affiliates, you will pay us an additional sourcing fee as follows: (i) if you acquire a single additional franchise, the sourcing fee will be $28,000 (in addition to the Initial Franchise Fee); (ii) if you acquire Development Rights under a Multi-Unit Agreement for the right to open two (2) additional Studios, then the sourcing fee will be $40,000 (in addition to your Development Fee); (iii) if you acquire Development Rights under a Multi-Unit Agreement for the right to open three (3) to five (5) Studios, then the sourcing fee will be $50,000 (in addition to your Development Fee); (iv) if you acquire Development Rights under a Multi-unit Agreement for the right to open six (6) to nine (9) Studios, then the sourcing fee will be $84,000 (in addition to your Development Fee); and (v) if you acquire Development Rights under a Multi-Unit Agreement for the right to open ten (10) or more Studios, then the sourcing fee will be $120,000 (in addition to your Development Fee). Any applicable sourcing fee will be due on the signing of your Franchise Agreement and/or Multi-Unit Agreement, will be fully earned upon payment, and will not be refundable under any circumstances. In this instance,
you will sign the Form of Sourcing Fee Addendum (Franchise Agreement), as attached as Exhibit L-1, and/or the Form of Sourcing Fee Addendum (Multi-Uni
Source: Item 5 — INITIAL FEES (FDD pages 18–21)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, if an existing franchisee acquires a single additional franchise and a franchise broker is owed a commission for the introduction, Bft requires the franchisee to pay a sourcing fee. This sourcing fee is $28,000, and it is in addition to the standard Initial Franchise Fee. This fee helps Bft cover the commission owed to the broker.
This sourcing fee is due upon signing the Franchise Agreement and is considered fully earned by Bft upon payment. It is also explicitly stated as non-refundable under any circumstances. Franchisees will also need to sign the Form of Sourcing Fee Addendum (Franchise Agreement), which is attached as Exhibit L-1 to the FDD.
This policy ensures that franchise brokers are compensated for their role in facilitating franchise expansion within the Bft system. However, it also means that existing franchisees need to factor in this additional cost of $28,000 when planning to acquire additional single franchise units through a broker's assistance. It's important to note that this sourcing fee structure differs if the franchisee acquires development rights for multiple units under a Multi-Unit Agreement, as those scenarios have different sourcing fee amounts.