What are the conditions under which a Byrider franchisee can terminate the Franchise Agreement early (as implied by obligations in Item 9) and how does this relate to the initial franchise fee (Item 5)?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
M 5
INITIAL FEES
Franchise Agreement. You will pay a $60,000 lump sum franchise fee when you sign the Franchise Agreement. This initial franchise fee is refundable if Byrider Franchising Partners receives written notice from you within 60 days from the date of the Franchise Agreement and you sign the form of general release required by Byrider Franchising Partners. If you purchase additional franchises, you must pay the thencurrent nonrefundable initial franchise fee for each additional franchise. As of the date of this Disclosure Document, the initial franchise fee for each additional franchise is $35,000 (if you are a Traditional Franchisee, as provided below) or $40,000 (if you are an Ultra Franchisee, as provided below). The initial franchise fee for additional franchises is subject to change at the discretion of Byrider Franchising Partners without prior notice. Except as described above, the initial franchise fee is not refundable under any circumstances.
Other than for Byrider Businesses operated by affiliates or other related companies (where the initial franchise fee is and has been waived) the initial franchise fee is and has been uniform.
Reduced Franchise Fee for Veterans. If you are a veteran of the U.S. Armed Forces, your initial franchise fee will be reduced by $10,000. For purposes of determining whether you qualify, a "veteran" means a person who served in the active military, naval, air, or space service, and who was discharged or released therefrom under conditions other than dishonorable. If this applies to you, you will sign the Veteran Discount Addendum (attached as Exhibit K).
Area Development Agreement Rider. If you are granted the right to purchase additional franchises, you must sign the applicable Area Development Agreement Rider. If you or your affiliate(s) have signed a Franchise Agreement with Byrider Franchising prior to January 1, 2021 for at least one Byrider Business, and you are otherwise in compliance with that agreement and all other franchise agreements with Byrider Franchising Partners, you will be considered a "Traditional Franchisee." If you or your affiliate(s) have not signed a Franchise Agreement with Byrider Franchising prior to January 1, 2021 for at least one Byrider Business, then you will be considered a "Ultra Franchisee." If you are a Traditional Franchisee, you will sign the Traditional Area Development Agreement Rider, attached to this disclosure document as Exhibit C-1 (the "Traditional Area Development Agreement"), or if you are an Ultra Franchisee, you will sign the Ultra Area Development Agreement Rider, attached to this disclosure document as Exhibit C-2 (the "Ultra Area Development Agreement").
Under the Traditional Area Development Agreement, you must pay us a development fee of $17,500 multiplied by the number of Byrider Businesses to be developed under the Development Schedule in addition to the first Byrider Business.
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, a franchisee can terminate the agreement early under certain conditions, and this may have implications for the initial franchise fee. Specifically, a Byrider franchisee may terminate the agreement if they are in compliance with the Franchise Agreement and Byrider Franchising Partners materially breaches the agreement, provided Byrider does not cure the breach. Additionally, the franchisee may terminate the agreement on any grounds available by law.
Regarding the initial franchise fee, Byrider charges a $60,000 lump sum, which is generally non-refundable. However, if a franchisee provides written notice within 60 days of signing the Franchise Agreement and signs a general release, the initial fee is refundable. This refund policy is the only circumstance described where the initial fee is refundable. The FDD states that Byrider uses the initial franchise fee to cover costs related to site review and approval, sales, legal compliance, salary, and general administrative expenses and profits.
While the FDD outlines conditions for franchisee termination, it does not explicitly state whether a franchisee who terminates due to Byrider's breach would be entitled to a refund of the initial franchise fee outside the initial 60-day window. A prospective franchisee should seek clarification from Byrider regarding the refund policy in cases where the franchisee terminates the agreement due to Byrider's failure to uphold its obligations.