When is the initial fee for a Bimbo Foods Bakeries Distribution distributorship due?
Bimbo_Foods_Bakeries_Distribution Franchise · 2025 FDDAnswer from 2025 FDD Document
. The initial fee is to be paid in one lump sum payment at the time of the delivery of the Bill of Sale and execution of the other agreements (i.e., any other agreements applicable to you that are included with this disclosure document, e.g., Distribution Agreement, Sales Growth Agreement, any applicable financing documents, and any security agreements, etc.), some or all of which may be financed as detailed in Item 10 and Exhibit B to this disclosure document. This initial fee is a purchase fee and therefore is non-refundable. A provision is included in the Distribution Agreement and Sales Growth
Agreement (section 9.6) that provides us the right to, at any time while the Distribution Agreement is in effect, to purchase all or a portion of your Distribution Rights by providing you 30 days notice of same and paying you the fair market value of your Distribution Rights as determined by using a formula that includes looking at the sales multiple used in comparable sales of similarly situated BFBD distribution rights as well as the net average weekly sales in all of your Outlets. We may deduct from the purchase price for any sale/purchase of the Distribution Rights any money that you owe to us, as well as any money you owe to certain third parties you've authorized us to pay on your behalf and a reasonable estimate to cover charges that you may owe that will not post until after the purchase of the rights.
Source: Item 5 — INITIAL FEES (FDD pages 29–30)
What This Means (2025 FDD)
According to Bimbo Foods Bakeries Distribution's 2025 Franchise Disclosure Document, the initial fee for acquiring Distribution Rights is due in one lump sum payment. This payment is required at the time of the delivery of the Bill of Sale and the execution of other applicable agreements. These agreements include the Distribution Agreement, Sales Growth Agreement, any financing documents, and any security agreements. The initial fee is a purchase fee and is non-refundable.
For prospective Bimbo Foods Bakeries Distribution distributors, this means that you must have the full initial fee amount available when finalizing the purchase of your distribution rights. Depending on whether you purchase the rights from Bimbo Foods Bakeries Distribution or an existing distributor, the initial fee can range from $8,000 to $500,000. However, if purchasing from an existing distributor, the initial fee could fall outside of this range. It is important to note that this fee may be able to be financed, as detailed in Item 10 and Exhibit B of the FDD.
This upfront payment is a standard practice in franchising, as it secures the franchisee's rights to operate under the Bimbo Foods Bakeries Distribution brand and utilize their distribution system. The non-refundable nature of the fee highlights the importance of conducting thorough due diligence and ensuring that you are fully committed to the Bimbo Foods Bakeries Distribution franchise before making the purchase. Additionally, you will need to pay a fee of approximately $1,300-$2,000 to purchase a hand-held computer order system and purchase a sufficient opening inventory of Products (typically ranging from $2,500 to $15,000).
Bimbo Foods Bakeries Distribution also has the right to purchase all or a portion of your Distribution Rights by providing you 30 days notice of same and paying you the fair market value of your Distribution Rights. As a condition of Bimbo Foods Bakeries Distribution approving any sale of the Distribution Rights to a third party or of you receiving the purchase price in sale of the Distribution Rights to them, you must execute and deliver to them a General Release in their favor.