For a multi-unit Crab N Spice development, when are the franchise fees due?

According to Crab N Spice's 2024 Franchise Disclosure Document, if a franchisee enters into a Multi-Unit Development Agreement (MUDA), they will pay all franchise fees upon signing the MUDA. The franchise fees are $20,000 for each franchise under the MUDA. However, the franchisee will not pay an additional training fee for units managed by the same person. The site approval fee will be collected for each site as they are approved. These franchise fees are not refundable.

This means that a prospective multi-unit Crab N Spice franchisee needs to be prepared to pay the entire franchise fee for all units covered by the MUDA upfront. This could represent a significant initial investment, as the fees are $20,000 per franchise. The non-refundable nature of these fees means that if the franchisee is unable to open all the units outlined in the development agreement, they will not receive a refund of the franchise fees paid.

It is important to note that while the franchise fee is paid upfront, other fees such as the site approval fee are collected for each site as it is approved. This provides some flexibility, as these fees are only due as each specific location progresses through the approval process. Additionally, the training fee is waived for units managed by the same person, which can result in cost savings for multi-unit operators.

Prospective franchisees should carefully consider their financial capacity and development plans before signing a MUDA with Crab N Spice, as the upfront payment of franchise fees represents a significant financial commitment. They should also clarify with Crab N Spice the specific terms and conditions of the MUDA, including the development schedule and any potential consequences for failing to meet the agreed-upon milestones.