What fees are associated with purchasing a Conversion Site from Costa Vida Fresh Mexican Grill?
Costa_Vida_Fresh_Mexican_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
default of this agreement.
- (v) Any Target Site for which you execute the Franchise Documents and develop and open a Costa Vida Restaurant will count towards the Development Schedule.
- (vi) For the avoidance of doubt, we are not required to give notice to you or to offer you a franchise to develop a Costa Vida Restaurant with regard to any Target Site or Conversion Site (defined below) within the Development Area and may develop and open (or franchise others to develop and operate) a Costa Vida Restaurant at the Target Site or Conversion Site after the Term of this Agreement expires as provided in Section 2.A above.
F. CONVERSION SITES.
- (i) If during the Term, we acquire the shares or assets (which may include furniture, fixtures, equipment, leasehold improvements and/or leasehold interests) of any business operating retail outlets at one or more sites located within the Development Area which meets our specifications and standards for conversion to Costa Vida Restaurants (in each case a "Conversion Site"), and we determine in our sole discretion to convert any Conversion Sites within your Development Area to Costa Vida Restaurants, we will offer to sell such Conversion Sites to you for the price paid by us for such Conversion Sites if:
- (A) The sale will not, in our judgment, conflict with any existing legal obligation of us or the business being acquired;
- (B) The sale will not, in our judgment, preclude the completion of the acquisition on the terms agreed to by us and the seller;
- (C) The sale will not, in our judgment, interfere with any other legal agreement, arrangement or combination or affect federal or state income tax consequences arising from the acquisition in a manner adverse to any of the parties to the acquisition;
- (D) You agree, at our option, to include in your purchase (at a price determined on the same basis as for Conversion Sites) certain acquired stores which fall within the Development Area but which do not meet our criteria for conversion to Costa Vida Restaurants and which may have to be closed or sold to a third party subsequent to your acquisition; and
- (E) You agree to (i) execute, concurrently with your purchase, the appropriate Franchise Documents and pay the fees, including the initial franchise fee, that we are then charging for new Costa Vida Restaurants franchises, for each Conversion Site in the Development Area, (ii) convert each Conversion Site to a Costa Vida Restaurant as soon as practicable thereafter (but in no event later than the date reasonably specified by us) in accordance with our standards and specifications, and (iii) close or sell, within the reasonable time period specified by us, any acquired sites which are not suitable for conversion.
Source: Item 23 — RECEIPTS (FDD pages 67–282)
What This Means (2025 FDD)
According to the 2025 FDD, if Costa Vida Fresh Mexican Grill offers you a Conversion Site (an existing retail location they acquire and want to convert to a Costa Vida restaurant), you will be responsible for several fees. The primary cost is the price Costa Vida Fresh Mexican Grill paid for the Conversion Site, which includes direct and indirect costs and liabilities incurred during the acquisition. This encompasses payments to the seller, affiliates, or third parties, along with other expenses related to the site, such as operational losses or closing costs from acquired units, plus interest.
In addition to the purchase price, you must execute the appropriate Franchise Documents and pay the initial franchise fee that Costa Vida Fresh Mexican Grill is charging for new franchises at the time. The FDD specifies that you may also have to purchase acquired stores within your Development Area that do not meet the criteria for conversion, and these may need to be closed or sold.
Furthermore, Costa Vida Fresh Mexican Grill may require you to pay their related travel expenses for on-site evaluation of potential sites in extraordinary circumstances. You are also responsible for a site location fee plus reasonable out-of-pocket expenses incurred by Costa Vida Fresh Mexican Grill in locating the Target Site and partially negotiating the lease or purchase agreement. These fees ensure that the franchisee bears the costs associated with site acquisition, evaluation, and conversion, in addition to the standard franchise fees.