What factors influence the Crawlspace Medic Development Fee for three or more locations?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
For three locations (or more), the development fee shall be determined on a case by case basis depending upon the territory size and potential.
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 franchisees interested in opening three or more locations is determined on a case-by-case basis. The two primary factors influencing the fee are the territory size and its potential. This suggests that larger territories with greater market opportunities will likely command higher development fees.
This approach to setting the development fee provides Crawlspace Medic with flexibility in pricing multi-unit development agreements. It allows them to consider the specific characteristics of each market and adjust the fee accordingly. For a prospective franchisee, this means the development fee is not a fixed amount but is negotiable based on the territory they wish to develop.
It's important to note that the development fee is fully earned by Crawlspace Medic upon signing the Multi-Unit Development Agreement and is non-refundable under any circumstances. However, the developer will receive a credit from the development fee that can be applied to the initial franchise fee due under each individual Franchise Agreement as each location opens. This provides some financial relief as the franchisee expands their Crawlspace Medic business.