What are the specific pre-opening obligations of Byrider Franchising Partners (Item 11) and how do these obligations relate to the franchisee's estimated initial investment (Item 7)?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
igation.
ITEM 11
FRANCHISOR'S ASSISTANCE, ADVERTISING, TECHNOLOGY SYSTEM, AND TRAINING
Except as listed below, Byrider Franchising Partners is not required to provide you with any assistance.
A. Pre-Opening Obligations.
Before you open the Business, Byrider Franchising Partners provides:
- Site Approval. You will select a site for your Business and submit the location to Byrider Franchising Partners for approval. Byrider Franchising Partners approves your Business location if the location is considered appropriate. Byrider Franchising Partners considers several factors when it accepts or rejects a proposed site including demographics of the location, accessibility, daily traffic counts, level of competition, rent and construction costs and whether there is sufficient residential and commercial backup to support the Business. Byrider Franchising Partners will provide you with written notice of approval or disapproval of the proposed site within 30 days after receiving your written proposal. If you do not receive our approval or disapproval within 30 days, the location will be considered disapproved and you will need to resubmit the site. In the event your submitted site is not approved, you will need to submit alternate sites until one is approved. You are responsible for acquiring a suitable site for your Business. Byrider Franchising Partners does not typically own or lease the premises to you. (Franchise Agreement - Article 6.4)
Upon the written approval of the proposed Business location, you will execute a lease (if the Business location is to be leased) or a binding agreement to purchase the site, with terms that have been approved by Byrider Franchising Partners. Byrider Franchising Partners' approval of the lease will be conditioned upon execution of the lease addendum attached as Exhibit G to the Franchise Agreement by you and the landlord.
The typical length of time between the signing of the Franchise Agreement or the first payment of consideration for the Businesses and the opening of the Businesses is about 180 to 360 days. Factors that affect this length of time include the time it takes to arrange financing, meet local ordinances or community requirements and complete delivery of equipment. You must open the Business within 1 year after signing the Franchise Agreement, and if you fail to do so, Byrider Franchising Partners may terminate the Franchise Agreement. If that happens, you will not receive a refund for your initial franchise fee. (Franchise Agreement – Article 16.1).
Under the Area Development Agreement, Byrider Franchising Partners must approve the location of any future/additional Byrider Business that you intend to develop pursuant to the Area Development Agreement. Byrider Franchising Partners'
then-current standards for sites and territories will apply. (Area Development Agreement – Article 2).
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- Approved Specifications. As discussed in Item 8, Byrider Franchising Partners identifies the specifications for the building, equipment, furnishings, decor, layout and signs required to open and operate the Business, assists with layout and approves development plans and provides you with a list of approved suppliers and sources for supplies. (Franchise Agreement Article 6.2).
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- Operations Manual. Byrider Franchising Partners makes available to you its Manuals on Byrider Franchising Partners' website. (Franchise Agreement Article 6.3) The Tables of Contents of the Manuals are attached to this Disclosure Document as Exhibit E. The current Manuals are comprised of approximately 4,800 pages.
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- Training. Byrider Franchising Partners provides training for your personnel and provides guidance with staffing and inventory acquisition. (Franchise Agreement Article 6.1). This training is described in detail later in this Item.
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- Technology Installation. You will be responsible for acquiring, installing and maintaining all technology at your location. A stable, business-class internet connection (preferably redundant connections) will be required to access technology resources hosted by Byrider Franchising Partners or third-party providers.
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, Byrider Franchising Partners provides several forms of assistance to franchisees before they open their business. These pre-opening obligations include site approval, where Byrider Franchising Partners reviews and approves the franchisee's chosen location based on factors like demographics, accessibility, traffic, competition, and costs. Byrider also identifies specifications for the building, equipment, furnishings, decor, layout, and signs, and assists with layout and approves development plans. Byrider Franchising Partners also makes its operations manuals available to franchisees on its website. Byrider Franchising Partners provides training for franchisee personnel and guidance with staffing and inventory acquisition. Finally, Byrider Franchising Partners guides franchisees in lease analysis and/or purchase.
These pre-opening obligations directly relate to the franchisee's initial investment as detailed in Item 7. For example, the site approval process influences real estate costs, which can vary widely. The specifications for building, equipment, furnishings, and signs impact the expenses for furniture, fixtures, equipment, signage, and technology systems. The franchisee has the option to lease or purchase these items, affecting the initial investment amount. The cost of initial inventory, which Byrider Franchising Partners estimates can be up to $300,000 if purchased outright, is also a significant consideration.
Furthermore, the technology installation assistance connects to the technology system costs outlined in Item 7, where franchisees are responsible for acquiring, installing, and maintaining all technology. The training provided by Byrider Franchising Partners also has cost implications, as while the initial training program is offered without charge for a Designated Manager and up to three additional employees, the franchisee is responsible for travel and living expenses during training. There is also a $2,500 nonrefundable fee for each additional employee attending the Initial Training Program. Understanding these pre-opening obligations and their associated costs is crucial for prospective franchisees to accurately estimate their initial investment and plan their finances accordingly.