Is the initial franchise fee for a Clean Your Dirty Face franchise refundable?
Clean_Your_Dirty_Face Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company sells individual franchises. The franchise agreements typically require the franchisee to pay an initial, non-refundable fee prior to opening the respective location(s), and continuing royalty fees on a monthly basis based upon a percentage of franchisee gross sales, as defined by the franchise agreement.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)
What This Means (2025 FDD)
According to the 2025 FDD, the initial franchise fee paid to Clean Your Dirty Face is non-refundable. This means that once a franchisee pays the initial fee to secure the rights to open and operate a Clean Your Dirty Face franchise, they cannot get that money back, regardless of whether they eventually open the location.
This non-refundable policy is a fairly standard practice in the franchise industry. It compensates Clean Your Dirty Face for the administrative and preparatory work they undertake when awarding a franchise. This work includes processing the application, conducting due diligence, providing initial training, and offering pre-opening support.
For a prospective Clean Your Dirty Face franchisee, it's crucial to fully understand the implications of a non-refundable fee. Before signing the franchise agreement and paying the initial fee, candidates should conduct thorough due diligence, carefully review the FDD, and seek professional advice to ensure they are making an informed decision. This includes assessing their financial capabilities, understanding the market potential in their desired location, and evaluating the terms and conditions of the franchise agreement.
While the initial franchise fee is non-refundable, Clean Your Dirty Face recognizes revenue related to the franchise rights when the store opens, and revenue allocated to pre-opening activities is recognized when those services are performed. This accounting practice does not change the franchisee's inability to recover the initial fee but provides insight into how Clean Your Dirty Face accounts for the fee on their financial statements.