What fee within the C3 Wellness Spa Franchise Agreement is modified by the Development Agreement?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
Agreement that is modified by this Agreement is the fixed one-time initial franchise fee paid by Franchisee to Franchisor at the time of signing the Franchise Agreement, as such initial franchise fee is set forth and defined in Section 4.2 of this Agreement as to the Development Spas.
Source: Item 23 — RECEIPTS (FDD pages 59–293)
What This Means (2024 FDD)
According to C3 Wellness Spa's 2024 Franchise Disclosure Document, the Development Agreement modifies the initial franchise fee. Specifically, Section 4.2 of the Development Agreement addresses the one-time initial franchise fee paid by the franchisee when signing the Franchise Agreement for Development Spas.
For the first Development Spa, a franchisee pays an initial franchise fee of $45,000 upon execution of the Franchise Agreement. This fee is separate from and in addition to the Development Area Fee. However, for each additional Development Spa beyond the first, the initial franchise fee is waived ($0), provided the franchisee is not in default of the C3 Wellness Multi-Unit Development Agreement, including the Development Schedule, or any other agreement with the franchisor.
This waiver of the initial franchise fee for subsequent locations is a significant benefit for franchisees entering into a multi-unit development agreement with C3 Wellness Spa. It incentivizes the development of multiple locations by reducing the upfront investment required for each additional spa. However, it's crucial for franchisees to adhere to the Development Schedule and remain in compliance with all agreements to maintain eligibility for the waived fee. Failure to meet these requirements could result in the standard initial franchise fee being reinstated for each additional spa.