What is the total initial payment due to Byrider upon execution of the Area Development Agreement?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
bleness of Development Schedule. The Franchisee approves of the foregoing development schedule as being reasonable and viable, and recognizes the development schedule is necessary to insure acceptable Byrider development of the Exclusive Development Area.
| B. | | Initial Franchise Fee. | The initial franchise fees are as follows: | |----|----------------------|----------------------------------------------------------------------|----------------------------------------------------------| | | 1. | 1st franchise: | $60,000.00 | | | 2. | 2nd franchise: | $35,000.00 | | | 3. | 3rd franchise: | $35,000.00 | | | 4. | 4th franchise: | $35,000.00 | | | | Total fee: | $165,000.00 |
- C. Payment Upon Closing. In conjunction with the execution of this Area Development Agreement, Franchisee shall pay to the Company $112,500.00, which represents the Initial Franchise Fee of $60,000.00 for the 1st franchise and a Development Fee of $17,500.00 for each of the 2nd-4th franchises. The Development Fee of $17,500.00 for each franchise shall be applied toward the Initial Franchise Fee for each of the 2nd-4th franchises, respectively, developed under the terms of this Area Development Agreement. The remaining $17,500.00 due for each of the 2nd-4th franchises shall be paid upon Franchisee's execution of the franchise agreement for the particular franchise.
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, the initial payment due upon execution of the Area Development Agreement is either $120,000 or $112,500, depending on the version of the agreement. Both versions specify that this payment covers the Initial Franchise Fee for the first franchise ($60,000) and a Development Fee for each of the 2nd through 4th franchises. In one version, the Development Fee is $20,000 per franchise, totaling $60,000 for the three franchises, resulting in the $120,000 total. In the other version, the Development Fee is $17,500 per franchise, totaling $52,500 for the three franchises, resulting in the $112,500 total.
For a prospective Byrider franchisee, this means a significant upfront investment is required to secure the rights to develop multiple franchise locations. The Development Fee for each subsequent franchise is applied toward that franchise's Initial Franchise Fee. The remaining balance of the Initial Franchise Fee for each of the 2nd through 4th franchises is due upon the execution of the individual franchise agreement for that particular location.
It is important to note that all fees paid under the Area Development Agreement are nonrefundable. This highlights the risk involved, as the franchisee will not be able to recover these initial payments even if they are unable to develop all of the planned franchise locations. The franchisee should carefully consider their ability to meet the development schedule and financial obligations before entering into the Area Development Agreement with Byrider.
Prospective franchisees should clarify with Byrider which version of the Area Development Agreement applies to them and confirm the exact amount of the initial payment required. Understanding the specific terms and conditions of the agreement, including the nonrefundable nature of the fees, is crucial for making an informed investment decision.