Does a Chocolate Fish Coffee franchise assignee have to pay an initial franchise fee?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
- (iv) Franchisee and its Owners execute Chocolate Fish Franchising's then-current standard form of franchise agreement and related documents (including personal guaranty), which may be materially different than this form (including, without limitation, higher and/or different fees), except that Franchisee will not pay another initial franchise fee and will not receive more renewal or successor terms than described in this Section;
Source: Item 23 — RECEIPTS (FDD pages 41–119)
What This Means (2024 FDD)
The 2024 Franchise Disclosure Document for Chocolate Fish Coffee addresses the conditions for entering into successor agreements, which is relevant to the question of fees upon assignment. Specifically, if a franchisee wants to renew their agreement at the end of the initial term, they must execute Chocolate Fish Franchising's then-current standard form of franchise agreement.
According to the FDD, the new franchise agreement executed at the time of renewal may be materially different than the original, potentially including higher or different fees. However, the franchisee will not pay another initial franchise fee.
This indicates that while other fees might change upon renewal or assignment to a successor, Chocolate Fish Coffee specifically waives the initial franchise fee in this circumstance. This could be a significant benefit for existing franchisees looking to extend their agreement, as it reduces the financial burden associated with renewal.