Does the Crawlspace Medic Franchise Agreement include a section on 'Fees'?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
s granted under this Agreement, Developer shall pay Franchisor a development fee (the "Development Fee") in the following amount:
| Number Develop | of | Outlets | to | Development Fee |
|---|---|---|---|---|
| 2 | $118,000 | |||
| 3 | To Be Determined |
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.
5 EXERCISE OF DEVELOPMENT RIGHTS.
5.1 Valid Exercise.
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2024 FDD)
According to the 2024 Crawlspace Medic Franchise Disclosure Document, the franchise agreement does address fees. Specifically, it mentions a Development Fee for multi-unit development agreements, which is determined on a case-by-case basis depending on the territory size and potential. This Development Fee is fully earned upon signing the Multi-Unit Development Agreement and is non-refundable.
For developers of multiple Crawlspace Medic locations, the Development Fee can be credited towards the Initial Franchise Fee due under each individual Franchise Agreement. This means that as the developer executes additional Franchise Agreements, they receive corresponding credits from the Development Fee, which offsets the Initial Franchise Fee for each new outlet.
Additionally, franchisees are responsible for technology fees, including costs for computer hardware and software, recurring software and Internet access fees, license fees, help desk fees, and fees for a franchise portal or benchmarking platform. Currently, this technology fee is 0.5% of Gross Revenue per unit per month. These fees cover the costs associated with the technology required by the Franchise Agreement.