For a multi-unit Crab N Spice development, is the site approval fee collected for each site?
Crab_N_Spice Franchise · 2024 FDDAnswer from 2024 FDD Document
ti-Unit Development
If you and we agree that you will develop multiple franchises, then you will sign our Multi-Unit Development Agreement ("MUDA") in the form of Exhibit C to this disclosure document. Your franchise fees will be $20,000 for each franchise but you 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. You will pay all franchise fees upon signing the MUDA. They
Source: Item 5 — INITIAL FEES (FDD page 11)
What This Means (2024 FDD)
According to Crab N Spice's 2024 Franchise Disclosure Document, if a franchisee enters into a Multi-Unit Development Agreement (MUDA) with Crab N Spice, a site approval fee of $5,000 will be collected for each site as they are approved. The franchisee will pay all franchise fees upon signing the MUDA, and these fees are non-refundable.
This means that for each location a multi-unit developer wants to open, Crab N Spice must approve the site, and the franchisee must pay the $5,000 site approval fee. This fee is in addition to the initial franchise fee of $20,000 for each franchise.
This policy ensures that Crab N Spice retains control over the locations of its franchises, even within a multi-unit development agreement. It also provides Crab N Spice with additional revenue as the franchisee expands. Prospective franchisees should factor these site approval fees into their financial projections when considering a multi-unit development agreement with Crab N Spice.