Are the initial franchise fee and development fee refundable for a Cinch I.T. franchise?
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 the 2024 Cinch I.T. Franchise Disclosure Document, both the initial franchise fee and the development fee are non-refundable. The initial franchise fee is $15,000, and the development fee is for each additional Cinch I.T. franchised business to be developed under the agreement. These fees are due in full upon the execution of the agreement.
The FDD states that all amounts collected are deemed fully earned immediately upon receipt. This means that once Cinch I.T. receives these fees, they are considered fully earned and will not be refunded, regardless of whether the franchisee opens any of the Cinch I.T. franchised businesses they are obligated to open in the development area.
For a prospective Cinch I.T. franchisee, this non-refundable policy underscores the importance of careful due diligence before signing the franchise agreement and paying the initial franchise and development fees. Franchisees should be confident in their ability to meet the development schedule and open the agreed-upon number of locations, as failure to do so will not result in a refund of these fees. Cinch I.T. will credit each development fee paid as full payment of the initial franchise fee due for each subsequent franchise to be opened under the agreement.