When is the initial franchise fee due for a Cilantro Taco Grill franchise?
Cilantro_Taco_Grill Franchise · 2024 FDDAnswer from 2024 FDD Document
5: INITIAL FEES**
We will charge you an initial franchise fee ("Initial Franchise Fee") when you sign the Franchise Agreement. The Initial Franchise Fee is $35,000. This payment is fully earned by us and due in lump sum when you sign the Franchise Agreement. The Initial Franchise Fee is not refundable under any circumstance.
If we perform an on-site location evaluation of the prospective site for the Franchised Business, you must pay to us our per diem fee of $500 and reimburse our representative's expenses, including travel, lodging and meals.
You must spend $15,000 on a grand opening advertising campaign to promote the opening of the Franchised Business. We reserve the right to collect this money from you and conduct the grand opening advertising campaign on your behalf. If we collect this money from you for the grand opening advertising campaign, it is non-refundable.
If your Franchised Business does not open within 12 months after you have signed the Franchise Agreement, except for circumstances that are not in your control, you must pay to us a delayed opening fee of $100 per day for each day that the opening of your Franchised Business is delayed, up to a maximum of 90 additional days. If your Store is not open after this additional 90 day period, then we may terminate your Franchise Agreement or we may require you to continue paying the delayed opening fee until your Store has opened. This fee is not refundable.
Source: Item 5 — INITIAL FEES (FDD pages 11–12)
What This Means (2024 FDD)
According to Cilantro Taco Grill's 2024 Franchise Disclosure Document, the initial franchise fee of $35,000 is due in a lump sum when you sign the Franchise Agreement. This payment is considered fully earned by Cilantro Taco Grill at that time and is non-refundable under any circumstances. This means that a prospective franchisee must have the full $35,000 available when they are ready to commit to the franchise agreement.
For franchisees entering into a Multi-Unit Operator Agreement, a development fee is charged when the agreement is signed. The development fee is based on the number of Cilantro Taco Grill franchises the operator commits to developing. The fee is calculated as $35,000 for each of the first three to five outlets, plus $17,500 for each additional outlet, depending on the total number of franchises committed. This development fee is also fully earned upon signing the Multi-Unit Operator Agreement and is non-refundable.
In addition to the initial franchise fee, the FDD states that the remaining portion of the Initial Franchise Fee is due 90 days before the scheduled opening of the unit or the date you sign the lease for the premises, whichever occurs first. It is important to note that Cilantro Taco Grill may offer special incentive programs related to franchise development, but they reserve the right to modify or withdraw these programs without notice.