Is the Development Fee for a Chicken Guy franchise refundable, and how is it applied?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
FEES**
Development Agreement
You must pay a Development Fee in the amount of $50,000 for each Franchised Restaurant that you agree to develop when you sign the Development Agreement. If you sign a Development Agreement to develop three or more Franchised Restaurants, we will reduce the Development Fee to $40,000 for each Franchised Restaurant. The Development Fee is typically paid in one lump sum; however, in certain circumstances we may permit developers to pay the Development Fee in installments.
The Development Fee is not refundable, but will be credited against the Initial Franchise Fee, which is payable to us under each Franchise Agreement that you sign under the Development Agreement. The aggregate amount of the Initial Franchise Fee credits that we provide for the Franchise Agreements you sign will not exceed the amount of the Development Fee that you paid when you signed the Development Agreement. You must agree to develop at least one Chicken Guy! Restaur
Source: Item 5 — INITIAL FEES (FDD pages 10–11)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, the Development Fee is generally not refundable. The standard Development Fee is $50,000 for each restaurant a franchisee commits to develop under the Development Agreement. However, if a franchisee commits to developing three or more Chicken Guy restaurants, the Development Fee is reduced to $40,000 per restaurant.
The Development Fee is typically paid in one lump sum, although Chicken Guy may allow payment in installments under certain circumstances. While the Development Fee itself is non-refundable, it is credited towards the Initial Franchise Fee due for each restaurant opened under the Development Agreement. The total credit applied to the Initial Franchise Fees will not exceed the total Development Fee paid.
For example, if a franchisee pays a $50,000 Development Fee, that $50,000 will be applied to reduce the Initial Franchise Fees for the restaurants they open. Since the Initial Franchise Fee is $50,000, this means the franchisee would not have to pay an additional Initial Franchise Fee. This arrangement is common in franchising to incentivize multi-unit development while ensuring the franchisor is compensated for granting development rights.