When must the Development Fee and Franchise Fee be paid to Costa Vida Fresh Mexican Grill?
Costa_Vida_Fresh_Mexican_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
f time after signing a Franchise Agreement.
Under the Area Development Agreement you must pay, when you sign the ADA, a development fee of fifteen thousand dollars ($15,000) (the "Development Fee") for each Costa Vida Restaurant to be opened under the Development Schedule. The number of Costa Vida Restaurants that you may develop under a particular ADA is determined by mutual agreement. The number of Costa Vida Restaurants will vary depending upon a variety of factors, including: (1) existing population and anticipated population growth within the Development Area; (2) competition within the Development Area; (3) the availability of acceptable locations; (4) the number of Costa Vida Restaurants we estimate can be developed within the Development Area; and (5) the number of then-operating Costa Vida restaurants within the Development Area.
The ADA and the Franchise Agreement are signed simultaneously, and you must pay the Development Fee and the Franchise Fee at that time. You will pay the then-current Franchise Fee for each of your subsequent Restaurants at the time you sign the then-current form of the Franchise Agreement for those Restaurants.
The Franchise Fee associated with each Costa Vida Restaurant you are required to develop under an ADA is based on the Franchise Fee described in the then-current Franchise Disclosure Document. We will apply fifteen thousand dollars ($15,000) of the previously paid Development Fee under the ADA against the Franchise Fee payable under each subsequent Franchise Agreement entered into under the terms of the ADA. However, no portion of the Development Fee is refundable under any circumstances.
Other Initial Fees
Before opening your Restaurant, you must purchase certain products from us or our Affiliates, including initial inventories of mandatory branded clothing, uniforms, marketing materials and similar items. We estimate that these initial fees will range from $34,000 to $51,000. As more fully described in Item 7 below, you must also order and purchase or lease all required equipment, furnishings, fixtures and signs for your Restaurant. Once you have executed the lease for your site, you will need to secure from our approved vendors, the required equipment, furnishings, fixtures and signs for your Restaurant. You must make payment, including making deposits or setting up any escrow or other account that may be required by third-party vendors from which vendors are to be paid, within the timeframes required by the various approved vendors. We estimate that the total cost of this will range from $674,500 to $1,340,000 if we provide you with all of the décor and furniture, as well as the initial inventories of mandatory branded clothing, uniforms, marketing materials and similar items you need to open your Restaurant.
Source: Item 5 — INITIAL FEES (FDD pages 13–16)
What This Means (2025 FDD)
According to Costa Vida Fresh Mexican Grill's 2025 Franchise Disclosure Document, the timing of the Development Fee and Franchise Fee payments depends on whether the franchisee is entering into an Area Development Agreement (ADA) or a standard Franchise Agreement.
For a standard Initial Franchise Agreement, the franchisee must pay the initial franchise fee of $30,000 when signing the Franchise Agreement. This fee grants the right to use Costa Vida Fresh Mexican Grill's marks, recipes, and system. The franchise fee covers certain pre-opening services like prototypical plans, marketing materials, and training. This fee is considered fully earned and is non-refundable upon payment.
If the franchisee enters into an Area Development Agreement to develop multiple Costa Vida Fresh Mexican Grill restaurants, a development fee of $15,000 for each restaurant to be developed is due when signing the ADA. The ADA and the Franchise Agreement are signed simultaneously, and both the Development Fee and the Franchise Fee are due at that time. For each subsequent restaurant developed under the ADA, the franchisee will pay the then-current Franchise Fee when signing the Franchise Agreement for those restaurants. Costa Vida Fresh Mexican Grill will apply $15,000 of the previously paid Development Fee towards the Franchise Fee for each subsequent restaurant under the ADA; however, the Development Fee is non-refundable under any circumstances.