How is the development fee calculated for a Cd One Price Cleaners Development Rights Agreement?
Cd_One_Price_Cleaners Franchise · 2025 FDDAnswer from 2025 FDD Document
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Explanatory Notes:
- (1) The development fee is $5,000 multiplied by the number of additional CD Stores to be developed under the Development Rights Agreement. We expect Development Rights Agreements to cover between 2 and 10 CD Stores. We will apply $5,000 of the development fee toward the initial franchise fee owed under each franchise agreement that the Development Rights Agreement covers.
- (2) This amount covers the costs needed to begin looking for sites in the Development Area and for business plan preparation and related expenses during the initial 3-month period after signing the Development Rights Agreement, including fees to engage a real estate consultant to help locate potential sites in the market. There is no additional initial investment for training, real property, equipment, fixtures, other fixed assets, construction, remodeling, leasehold improvements, decorating costs, inventory, security deposits, utility deposits, business licenses or other prepaid expenses required under the Development Rights Agreement. You will incur costs for these and other expenses associated with developing and operating a CD Store under the Franchise Agreement.
- (3) We relied upon our Chief Executive Officer's and President's experience in developing and operating dry cleaning businesses and in the dry cleaning industry since 1984 in compiling these estimates for additional funds and other estimates in this table. You should review these figures carefully with a business advisor before deciding to acquire development rights. No part of this initial investment is refundable.
Source: Item 7 — Estimated Initial Investment (FDD pages 20–28)
What This Means (2025 FDD)
According to Cd One Price Cleaners' 2025 Franchise Disclosure Document, the development fee for a Development Rights Agreement is calculated by multiplying $5,000 by the number of additional Cd One Price Cleaners stores to be developed under the agreement. These agreements typically cover between 2 and 10 stores. Therefore, the total development fee will range from $10,000 to $50,000. This fee is paid in a lump sum upon signing the Development Rights Agreement. Cd One Price Cleaners will apply $5,000 of the development fee toward the initial franchise fee owed under each franchise agreement that the Development Rights Agreement covers.
In addition to the development fee, the estimated initial investment also includes additional funds ranging from $5,000 to $20,000, which are paid to third parties as incurred. The total estimated initial investment for a Development Rights Agreement ranges from $15,000 to $70,000. This total includes the development fee and the additional funds required during the initial three months.
The additional funds cover the costs needed to begin looking for sites in the Development Area, business plan preparation, and related expenses during the initial 3-month period after signing the Development Rights Agreement. This includes fees to engage a real estate consultant to help locate potential sites in the market. It is important to note that the development fee does not cover costs for training, real property, equipment, fixtures, other fixed assets, construction, remodeling, leasehold improvements, decorating costs, inventory, security deposits, utility deposits, business licenses, or other prepaid expenses required under the Development Rights Agreement. These costs will be incurred separately when developing and operating each Cd One Price Cleaners store under the individual Franchise Agreements.
Prospective franchisees should carefully review these figures with a business advisor before deciding to acquire development rights, as no part of this initial investment is refundable. Understanding the full scope of required investments, including those not covered by the development fee, is crucial for making an informed decision about pursuing a Development Rights Agreement with Cd One Price Cleaners.