Under what conditions is the Burros Fries Initial Franchise Fee nonrefundable?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
s. These start-up costs include the Initial Franchise Fee.
9. FRANCHISEE'S INITIAL FRANCHISE FEE
A. Initial Franchise Fee and Payment
By executing this Franchise Agreement, the applicant agrees to become a Franchisee and pay an Initial Franchise Fee in the amount of Thirty-Five Thousand dollars ($35,000) for a Burros & Fries Business. This Initial Franchise Fee includes a license to operate a single Burros & Fries Business in a Territory that is up to three (3) miles driven in any direction from the Business determined by boundaries as described in Section 6 of this Agreement. The Initial Franchise Fee includes a regional web page housed within our national website, the complete training program at our corporate headquarters and manuals. We choose to allocate some of that time to pre-opening or grand opening assistance.
The Initial Franchise Fee per this Agreement is due upon execution of this Franchise Agreement. The Initial Franchise Fee is uniform as to all persons currently acquiring a franchise as of the effective date of this Agreement, although this may change. The Initial Franchise Fee shall be paid in a lump sum in U.S. funds and shall be deemed fully earned and no
Source: Item 5 — INITIAL FEES (FDD pages 11–12)
What This Means (2024 FDD)
According to Burros Fries's 2024 Franchise Disclosure Document, the initial franchise fee of $35,000 is deemed fully earned and nonrefundable once the Franchise Agreement is executed. This fee covers the administrative and other expenses Burros Fries incurs in granting the franchise, as well as the lost opportunity to franchise others.
This means that a prospective Burros Fries franchisee should be certain of their decision before signing the Franchise Agreement, as the $35,000 initial fee will not be returned under any circumstances. This is a standard practice in franchising, as the franchisor incurs costs from the moment the agreement is signed, including training, site selection assistance, and other support services.
It is important for potential franchisees to conduct thorough due diligence, carefully review the Franchise Agreement, and seek legal and financial advice before committing to the Burros Fries franchise. Understanding the non-refundable nature of the initial fee is a critical part of this process.