Does the Coffee News franchise sales agreement contain variable consideration?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
anchise agreement
- $ 9,900.00 TOTAL
All initial fees and payments owed by franchisees shall be due in full upon our completion of all pre-opening obligations under the franchise agreement.
- 2.1.2 In addition to the publication of hardcopy format of Periodical, Franchisee shall have the option to publish the digital format of the Periodical ("Coffee News Online"). A onetime enrollment fee to participate publication of Coffee News Online, in the amount of $100.00 for Chil Consulting and $75.00 for Shadowfox Design, shall be paid upon enrollment.
- 2.1.3 Postponement Fees. In the event that Franchisee wishes to postpone the start date of Franchisee's business by one month or more, Franchisee needs to pay for additional $1,000.00 to us to obtain such extension and hold Franchisee's area for such one or more months before Franchisee pays the full amount due under the Agreement.
- 2.1.4 Weekly Fees. For the first Franchise granted to Franchisee, weekly payments of:
- 2.1.4.1 for hardcopy Periodical, $80 per week beginning upon the conclus
Source: Item 23 — Receipts (FDD pages 36–118)
What This Means (2025 FDD)
Based on the 2025 Coffee News Franchise Disclosure Document, the franchise agreement includes variable consideration in the form of weekly fees. For the first Coffee News franchise, a franchisee pays $80 per week for the hardcopy periodical, starting after the initial period. If a franchisee purchases multiple franchises under separate agreements, the weekly fee is $25 per additional franchise.
This means a Coffee News franchisee's ongoing costs will fluctuate depending on how many franchise territories they operate. The base weekly fee covers the primary franchise, while the additional, lower weekly fees incentivize and support the franchisee in expanding their Coffee News business by acquiring more territories.
In addition to weekly fees, the FDD states that a franchisee must pay a one-time enrollment fee to publish the digital format of the periodical, Coffee News Online. The fee is $100 for Chil Consulting and $75 for Shadowfox Design. Also, if a franchisee wishes to postpone the start date of their business by one month or more, they must pay an additional $1,000 to hold their area.