What is the initial purchase fee for Distribution Rights with Bimbo Foods Bakeries Distribution also known as?
Bimbo_Foods_Bakeries_Distribution Franchise · 2025 FDDAnswer from 2025 FDD Document
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You must pay an initial purchase fee (a.k.a. a "purchase price") to acquire your Distribution Rights. When acquiring Distribution Rights directly from BFBD, this purchase fee/price is calculated using a given multiple times a 52-week historical average of weekly net sales of different categories of certain specified Products to your Outlets. (As discussed in more detail in Item 10, this fee/price may be able to be financed.) The multiples may vary with the Product Category and for certain Outlets, depending on a variety of factors, including but not limited to the following: the type of area (e.g., urban, suburban or rural); the physical features of the land (e.g., bridges, mountains, etc.); the area of the United States; the population density of the area; the density of the business population; the average size of an average retail store; and other socioeconomic factors common to the area. There can be no assurance that the actual Product sales you achieve at your Outlets will match or exceed the historical 52-week average net sales used by BFBD in determining your initial purchase fee/price for your Distribution Rights, as past performance is not a guaranty of future results. See Item 19 below. When purchasing Distribution Rights directly from an already existing Distributor, the initial purchase fee/price is established by, and payable to, the selling Distributor; although BFBD will facilitate the transfer of the Distribution Rights to you.
BFBD estimates that the total of all initial fees in connection with the purchase of your Distribution Rights will range from $8,000 to $500,000 based on the factors described above. However, as mentioned, if you purchase your distribution rights from an existing BFBD Distributor (as opposed to from BFBD) that existing Distributor sets the price for such rights (which is the largest portion of the initial fees), so it is possible that your initial fees could fall outside of this range. 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.
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 purchase fee to acquire Distribution Rights is also known as a "purchase price." When acquiring Distribution Rights directly from Bimbo Foods Bakeries Distribution, this fee is calculated using a multiple times a 52-week historical average of weekly net sales of specific Products to your Outlets. The multiples may vary based on factors such as the type of area (urban, suburban, or rural), physical features of the land, the area of the United States, population density, business density, the average size of a retail store, and other socioeconomic factors.
The FDD estimates that the total of all initial fees in connection with the purchase of your Distribution Rights will range from $8,000 to $500,000 based on the factors described above. However, if you purchase your distribution rights from an existing Bimbo Foods Bakeries Distribution Distributor (as opposed to from Bimbo Foods Bakeries Distribution) that existing Distributor sets the price for such rights (which is the largest portion of the initial fees), so it is possible that your initial fees could fall outside of this range. This initial fee is paid in a lump sum at the time of the delivery of the Bill of Sale and execution of the other agreements.
It's important to note that there is no assurance that the actual Product sales you achieve at your Outlets will match or exceed the historical 52-week average net sales used by Bimbo Foods Bakeries Distribution in determining your initial purchase fee/price for your Distribution Rights, as past performance is not a guaranty of future results. The 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 Bimbo Foods Bakeries Distribution 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 Bimbo Foods Bakeries Distribution distribution rights as well as the net average weekly sales in all of your Outlets.