Is there a Sourcing Fee Addendum for the Multi-Unit Agreement included as an exhibit to the Bft Franchise Disclosure Document?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
I have received a disclosure document dated March 14, 2025, that included the following Exhibits:
Exhibit A Form of Franchise Agreement and Exhibits Exhibit H State Specific Addenda Exhibit B List of State Agents for Service of Process and State Administrators Exhibit I List of Franchisees Exhibit C Financial Statements Exhibit J List of Franchisees That Left System Exhibit D Guaranty of Performance Exhibit K Form of Multi-Unit Agreement Exhibit E Statement of Prospective Franchisee Exhibit L-1 Form of Sourcing Fee Addendum (Franchise Agreement) Exhibit F Table of Contents of Manual Exhibit L-2 Form of Sourcing Fee Addendum (Multi-Unit Agreement) Exhibit G Form of General Release Exhibit M Receipts
Source: Item 22 — CONTRACTS (FDD page 79)
What This Means (2025 FDD)
Yes, according to the 2025 Bft Franchise Disclosure Document, a Sourcing Fee Addendum for the Multi-Unit Agreement is included as an exhibit. Specifically, Exhibit L-2 is the Form of Sourcing Fee Addendum for the Multi-Unit Agreement. This addendum is relevant if an existing franchisee is acquiring additional franchises or Development Rights under a Multi-Unit Agreement and a franchise broker is owed a commission due to a previous introduction to Bft or its affiliates.
If a sourcing fee is applicable, the franchisee will be required to sign the Form of Sourcing Fee Addendum (Multi-Unit Agreement), which is attached as Exhibit L-2 to the FDD. The sourcing fee varies depending on the number of additional studios the franchisee plans to open. For instance, acquiring Development Rights for two additional studios incurs a sourcing fee of $40,000, while acquiring rights for ten or more studios results in a $120,000 sourcing fee. These fees are in addition to the Development Fee.
The sourcing fee is due upon signing the Multi-Unit Agreement and is considered fully earned upon payment. It is also explicitly stated as non-refundable under any circumstances. This means that once the agreement is signed and the fee is paid, the franchisee cannot recover the fee, regardless of any subsequent changes in plans or circumstances.
Prospective Bft franchisees should carefully review Exhibit L-2 to understand the terms and conditions of the Sourcing Fee Addendum, including the specific circumstances under which it applies and the amounts of the fees. It is also important to note that the sourcing fee is separate from and in addition to other fees, such as the Initial Franchise Fee and the Development Fee, and should be factored into the overall investment costs.