When is the sourcing fee due to Bft for existing franchisees acquiring additional franchises or Development Rights?
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, existing franchisees who owe a commission to a franchise broker for the purchase of additional franchises or Development Rights must pay a sourcing fee to Bft. This fee is due upon the signing of the Franchise Agreement or Multi-Unit Agreement. The sourcing fee is considered fully earned by Bft upon payment and is non-refundable under any circumstances.
The amount of the sourcing fee varies depending on the number of additional franchises or Development Rights acquired. For a single additional franchise, the sourcing fee is $28,000, in addition to the Initial Franchise Fee. If the franchisee acquires Development Rights for two additional studios, the sourcing fee is $40,000, plus the Development Fee. For Development Rights to open three to five studios, the sourcing fee is $50,000, plus the Development Fee. Acquiring rights for six to nine studios incurs an $84,000 sourcing fee, plus the Development Fee, and for ten or more studios, the sourcing fee is $120,000, plus the Development Fee.
In these instances, the franchisee will sign a Form of Sourcing Fee Addendum, which is attached as Exhibit L-1 for a Franchise Agreement and Exhibit L-2 for a Multi-Unit Agreement. Prospective franchisees should carefully review these addenda to understand their obligations regarding sourcing fees when expanding their Bft business.