When is the initial franchise fee and development fee due to Cinch I.T.?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchised Business to be developed under this Agreement, You may locate the business office of the Franchised Business pursuant to the terms of each Franchise Agreement. It is the express intent of the Parties hereto to limit Our responsibility under this Section to general guidance and assistance as We may periodically provide in Our operations manual ("Operations Manual").
- 4.2 You shall pay to Us an initial franchise fee ("Initial Franchise Fee") of Fifteen Thousand Dollars ($15,000.00) for the first CINCH I.T. Franchise Agreement and a development fee ("Development Fee") of _________ Dollars ($___________) for each additional CINCH I.T. Franchised Business to be developed under this Agreement. The Initial Franchise Fee and Development Fee are due in full upon the execution of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 60–269)
What This Means (2024 FDD)
According to Cinch I.T.'s 2024 Franchise Disclosure Document, the initial franchise fee and development fee are due upon the execution of the franchise agreement. The initial franchise fee for the first Cinch I.T. franchise is $15,000. The development fee is for each additional Cinch I.T. franchise to be developed under the agreement, with the specific amount not provided in this document.
For a prospective franchisee, this means that these fees must be paid upfront when signing the agreement, regardless of whether the franchisee ultimately opens all the Cinch I.T. locations they are obligated to open in the development area. However, the development fee paid will be credited as full payment of the initial franchise fee for each subsequent franchise opened under the agreement.
This payment schedule is fairly standard in the franchise industry, as initial fees are typically required to secure the franchise rights and cover the franchisor's initial costs. Franchisees should be aware of this immediate financial obligation and factor it into their initial investment planning. It is important to note that all amounts collected are deemed fully earned immediately upon receipt and are non-refundable.