Is the initial franchise fee for a Corner Bakery Cafe refundable?
Corner_Bakery_Cafe Franchise · 2025 FDDAnswer from 2025 FDD Document
EM 5 INITIAL FEES**
Initial Franchise Fee
When you sign the Franchise Agreement, you will pay an initial franchise fee to us in the amount of $40,000 (the "Initial Franchise Fee"). The Initial Franchise Fee is fully earned by us when paid by you, and it is not refundable for any reason.
Development Fee
When you sign the Development Agreement, you will pay a development fee in the amount of $20,000 for each Franchised Cafe that you agree to develop (the "Development Fee"). The Development Fee is fully earned by us when paid by you, and it is not refundable in consideration of administrative and other expenses incurred by us and for the development opportunities lost or deferred as a result of the rights granted to you in the Development Agreement. In addition, the Development Fee is not credited against any other fees that you will pay to us. You must agree to develop at least two Corner Bakery Cafes under a Development Agreement.
Design Development Fee
Once we have approved your site and you have completed due diligence as required in the Corner Bakery Cafe Operations Manual ("Manual"), we will engage the services of an architect or planner to prepare a design plan (the "Design Development Plan") for your Franchised Cafe. The Design Development Plan will include a schematic space plan layout, and exterior elevations showing desired branding. You must reimburse us for the cost of preparing the Design Development Plan according to the cost schedule set forth in the Manual, which currently includes a $5,000 base price plus add-ons based on the complexity of the project. This reimbursement is not refundable.
Source: Item 5 — INITIAL FEES (FDD page 11)
What This Means (2025 FDD)
According to the 2025 Corner Bakery Cafe Franchise Disclosure Document, the initial franchise fee is not refundable. The initial franchise fee is $40,000. This fee is paid when the Franchise Agreement is signed. Corner Bakery Cafe considers the initial franchise fee fully earned upon payment, meaning that it will not be returned to the franchisee under any circumstances.
In addition to the initial franchise fee, Corner Bakery Cafe also charges a development fee of $20,000 for each franchised cafe that the franchisee agrees to develop under a Development Agreement. This fee is also non-refundable. There is also a Design Development Fee. Once Corner Bakery Cafe approves the franchisee's site and the franchisee completes due diligence, Corner Bakery Cafe will engage an architect or planner to prepare a design plan for the franchised cafe. The franchisee must reimburse Corner Bakery Cafe for the cost of preparing the Design Development Plan according to the cost schedule set forth in the Manual, which currently includes a $5,000 base price plus add-ons based on the complexity of the project. This reimbursement is not refundable.
It is typical in the franchise industry for initial franchise fees to be non-refundable, as they cover the franchisor's initial costs of granting the franchise. However, prospective franchisees should carefully consider the implications of this non-refundable fee and ensure they are fully committed to the franchise before signing the Franchise Agreement and paying the fee. Franchisees should also be aware of the other fees that are non-refundable, such as the development fee and the design development fee.