When are the franchise fees due for a Chocolate Fish Coffee multi-unit development?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
- (b) Payment**.** Upon execution of this MUDA, Franchisee shall pay the total Initial Franchise Fee to Chocolate Fish Franchising. The Initial Franchise Fee is non-refundable.
- 2. Form of Agreement. For Store #1, Franchisee and Chocolate Fish Franchising have executed the Franchise Agreement simultaneously with this MUDA. For each additional Chocolate Fish Coffee franchise, Franchisee shall execute Chocolate Fish Franchising's thencurrent standard form of franchise agreement no later than three business days after Franchisee leases or acquires a location. This MUDA does not give Franchisee the right to construct, open, or operate a Chocolate Fish Coffee business, and Franchisee acknowledges that Franchisee may construct, open, and operate each Chocolate Fish Coffee business only pursuant to a separate
Source: Item 5 — INITIAL FEES (FDD pages 9–10)
What This Means (2024 FDD)
According to Chocolate Fish Coffee's 2024 Franchise Disclosure Document, the initial franchise fee for a multi-unit development agreement (MUDA) is due upon the execution of the MUDA. The FDD specifies that upon signing the MUDA, the franchisee is obligated to pay the total initial franchise fee to Chocolate Fish Franchising. This fee is explicitly stated as non-refundable.
For the first store under the MUDA, the franchisee and Chocolate Fish Coffee will execute a Franchise Agreement simultaneously with the MUDA. For each subsequent Chocolate Fish Coffee franchise, the franchisee must execute Chocolate Fish Coffee's current standard franchise agreement within three business days after leasing or acquiring a location. It is important to note that the MUDA itself does not grant the franchisee the right to construct, open, or operate a Chocolate Fish Coffee business. These rights are only granted through separate franchise agreements executed for each individual Chocolate Fish Coffee business.
For franchisees considering a multi-unit development, understanding the payment schedule for franchise fees is crucial for financial planning. The requirement to pay the entire initial franchise fee upon signing the MUDA means that franchisees must have sufficient capital readily available. The initial franchise fees are reduced to $22,500 for the second and each additional franchise. This up-front payment is a significant investment, and the non-refundable nature of the fee underscores the importance of thorough due diligence before entering into a MUDA with Chocolate Fish Coffee.