Upon signing what agreement must all Chocolate Bash franchise fees be paid?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of expenditure | Amount | Method of payment | When due | To whom payment is to be made | |
|---|---|---|---|---|---|
| Franchise fee (see Note 1) | $45,000 - | $45,000 | Check or wire transfer | Upon signing the franchise agreement | Us |
- This estimate assumes you sign a Multi-Unit Development Agreement for three to five franchises. The franchise fee for your first unit is counted in the "Estimated Initial Investment
- Franchise Agreement" table. Your initial franchise fees are reduced to $35,000 for the Second and subsequent franchises purchased. You will pay all franchise fees upon signing the MUDA.
| Type of expenditure | Amount | Method of payment | When due | To whom payment is to be made |
|---|---|---|---|---|
| Additional initial franchise fees (2-4 Units) (see Note 4) | $70,000 - $140,000 | Check or wire transfer | Upon signing the MUDA | Us |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 13–15)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, the timing of franchise fee payments depends on the type of agreement signed. For a standard franchise agreement, the franchise fee, which ranges from $45,000 to $45,000, is due upon signing the franchise agreement. This fee is payable to Chocolate Bash via check or wire transfer.
However, if a prospective franchisee enters into a Multi-Unit Development Agreement (MUDA) to develop multiple Chocolate Bash franchises, the payment schedule differs. The initial franchise fee for the first unit is included in the estimated initial investment for the franchise agreement. For the second and subsequent franchises purchased under the MUDA, the initial franchise fees are reduced to $35,000 per franchise.
These reduced franchise fees for additional units under a MUDA are due upon signing the Multi-Unit Development Agreement itself. Specifically, the FDD states that the additional initial franchise fees for 2-4 units, ranging from $70,000 to $140,000, are due upon signing the MUDA and are payable to Chocolate Bash via check or wire transfer. Therefore, franchisees should be aware of which agreement they are signing, as this determines when the franchise fees are due.