Is the Development Fee for a Buff City Soap development agreement refundable or recoupable?
Buff_City_Soap Franchise · 2025 FDDAnswer from 2025 FDD Document
- (ff) "Initial Franchise Fee" means an initial fee in the amount set forth in the Summary Page owed to Franchisor upon Developer's execution of a Buff City Soap Franchising, LLC Franchise Agreement in connection with each Makery developed hereunder, subject to application of any portion of the Development Fee pursuant to Section 6(a).
Source: Item 23 — Receipts (FDD pages 69–186)
What This Means (2025 FDD)
Based on the 2025 Buff City Soap Franchise Disclosure Document, the excerpts provided do not explicitly state whether the Development Fee is refundable or recoupable. However, the document does mention the Development Fee within the context of an Area Development Agreement. The summary page of the Area Development Agreement includes a field for the 'Development Fee' amount, along with other fees such as the Initial Franchise Fee and Offering Fee.
Additionally, the document defines 'Initial Franchise Fee' as an amount owed upon execution of a Franchise Agreement for each Makery developed, potentially subject to application of a portion of the Development Fee. This suggests that the Development Fee might be related to the Initial Franchise Fee for individual locations opened under the development agreement. The terms of the Development Agreement specify conditions under which the agreement can be terminated, which could potentially impact the Development Fee.
To fully understand the conditions for refundability or recoupment of the Development Fee, a prospective Buff City Soap franchisee should carefully review the complete Area Development Agreement and Franchise Agreement, specifically Section 6(a) referenced in the definition of 'Initial Franchise Fee'. It is essential to ask the franchisor directly about the specific circumstances, if any, under which the Development Fee is refundable or can be recouped through future franchise fees or other means.