When is the Crawlspace Medic Development Fee due for a Multi Unit Development Agreement?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
The Development Fee is fully earned at the time this Multi-Unit Development Agreement is signed and is not refundable under any circumstances. Developer shall pay the full amount of the Development Fee to Franchisor upon Developer's execution of this Agreement.
4.2 Application of Development Fee. Contemporaneous with the execution of this Agreement, Developer shall execute the initial Franchise Agreement for the first Crawlspace Medic outlet to be established pursuant to the Mandatory Development Schedule. Developer shall receive a corresponding credit from the Development Fee, which shall be applicable to the Initial Franchise Fee due under the initial Franchise Agreement. Upon the execution of each of additional Franchise Agreement for outlets to be developed hereunder, Developer shall receive a corresponding credit from the Development Fee, which shall be applicable to the full amount of the Initial Franchise Fee payable pursuant to each such additional Franchise Agreement. Upon Franchisor's approval, Developer may enter into the initial Franchise Agreement or any subsequent Franchise Agreement as required under this Agreement using a newly formed entity, such as a limited liability company, corporation or partnership, for the sole purpose of entering into a Franchise Agreement and operating the Crawlspace Medic outlet pursuant thereto, provided that Developer shall also personally sign such Franchise Agreement as a principal.
Source: Item 5 — INITIAL FEES (FDD pages 9–10)
What This Means (2024 FDD)
According to Crawlspace Medic's 2024 Franchise Disclosure Document, the Development Fee for a Multi-Unit Development Agreement is due upon signing the agreement. The document specifies that the Development Fee is considered fully earned at the time the agreement is signed and is non-refundable under any circumstances. Therefore, a prospective Crawlspace Medic multi-unit developer must be prepared to pay the full Development Fee when they execute the Multi-Unit Development Agreement.
For agreements covering three or more locations, the exact amount of the Development Fee is determined on a case-by-case basis. This determination depends on factors such as the size and potential of the territory being developed. This implies that the Development Fee is not a fixed amount but is negotiable and dependent on the specific market conditions and scope of the development agreement.
It is important for potential Crawlspace Medic developers to understand that this fee is non-refundable, regardless of whether they successfully develop all the planned locations. The developer receives a credit from the Development Fee that can be applied to the Initial Franchise Fee for each Crawlspace Medic outlet as each additional Franchise Agreement is executed.