Is the sourcing fee for Bft franchises in addition to the initial franchise fee?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
| ability company with its principal business | |
|---|---|
| address at 17877 | Von Karman Ave., Suite 100 Irvine, CA 92614 ("Franchisor"), and |
| , whose principal business address is | |
| ("Developer"). | |
| 1. , 20 this Sourcing Fee Unit Agreement. | Background. Developer and Franchisor are parties to that certain Multi-Unit Agreement dated (the "Multi-Unit Agreement") that has been signed concurrently with the signing of Addendum. This Sourcing Fee Addendum supersedes any inconsistent or conflicting provisions of the Multi-Unit Agreement. Terms not otherwise defined in this Sourcing Fee Addendum have the meanings as defined in the Multi-Unit Agreement. This Sourcing Fee Addendum is annexed to and forms part of the Multi |
| 2. | Sourcing Fee. Developer (and/or its affiliate(s)) currently operates an existing BFT Studio, and |
| in connection with the grant of the Development Rights under the Multi-Unit Agreement, a commission is owed | |
| to a third-party franchise broker based on a previously-made introduction to Franchisor or its affiliates. | |
| Accordingly, Developer agrees to pay, on its execution of the Multi-Unit Agreement, a non-refundable sourcing | |
| fee in the amount as follows (check as applicable): |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 57–66)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, the sourcing fee applies to developers acquiring development rights under a Multi-Unit Agreement and is separate from the Development Fee. This sourcing fee is a non-refundable payment due upon execution of the Multi-Unit Agreement. The purpose of the sourcing fee is to compensate a third-party franchise broker for introducing the developer to Bft.
The amount of the sourcing fee varies depending on the number of additional Bft studios the developer has the right to open under the Multi-Unit Agreement. For the right to open two additional Bft studios, the sourcing fee is $40,000. If the agreement grants the right to open three additional studios, the fee is $50,000. For the right to open six additional Bft studios, the sourcing fee amounts to $84,000.
This fee structure means that developers committing to larger expansions with Bft will incur higher sourcing fees. It is important for prospective multi-unit developers to factor this additional cost into their financial planning, as it is explicitly stated to be in addition to the Development Fee and is non-refundable. This arrangement is not uncommon in franchise systems that utilize brokers to facilitate franchise sales, particularly for multi-unit deals.