When is the Development Fee for a Buff City Soap area development agreement due and payable?
Buff_City_Soap Franchise · 2025 FDDAnswer from 2025 FDD Document
Initial Franchise Fee, as applicable, as further described in Section 6(a)) due thereunder. Upon Franchisor's approval of Developer's proposed site for each Makery in accordance with Sections 5(a) and 5(b), Developer must execute the Franchise Agreement for each Makery. Concurrently with Developer's execution and delivery to Franchisor of each Franchise Agreement, Developer and its Principals and Affiliates must, except to the extent prohibited by Applicable Law, execute and deliver to Franchisor a general release in form and substance satisfactory to Franchisor, of any and all claims against Franchisor, its Affiliates and its owners, officers, directors, employees, agents, successors and assigns accruing prior to the effective date of the Franchise Agreement, subject to Applicable Law. (e) Development by Developer or its Affiliates. Developer may develop the Makeries through one or more of its Affiliates provided such Affiliate is pre-approved in writing by Franchisor. In such case, (i) the Affiliate will execute the Franchise Agreement and its Principals will execute a Guaranty and Undertaking of Ob
Source: Item 23 — Receipts (FDD pages 69–186)
What This Means (2025 FDD)
According to Buff City Soap's 2025 Franchise Disclosure Document, the Development Fee is due and payable when the Area Development Agreement is signed. The Development Fee compensates Buff City Soap for expenses incurred during the negotiation and implementation of the agreement, as well as for development opportunities lost or deferred due to the rights granted to the developer. This fee is considered fully earned upon payment.
Importantly, the Development Fee is non-refundable and non-recoupable under any circumstances. However, upon signing the first Franchise Agreement connected to the Area Development Agreement, a portion of the Development Fee will be applied to cover the Initial Franchise Fee for that first location. Subsequently, a portion of the remaining Development Fee will be applied toward 50% of the Initial Franchise Fee for each subsequent franchise agreement signed under the Development Schedule.
This arrangement is typical in area development agreements, where the developer commits to opening multiple locations. The initial fee secures the territory, while portions are credited towards franchise fees as individual units open. Prospective Buff City Soap developers should note the non-refundable nature of the fee and factor it into their investment planning.