How does Crisp & Green determine the amount of the Development Fee?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
You must pay us a Development Fee in the amount set forth in the Rider. This fee is payable in full when you sign this Agreement. However, you will not be required to pay an initial franchise fee for any of the Franchised Restaurants you develop under this Agreement.
The Development Fee is consideration for this Agreement and not consideration for any Franchise Agreement, is fully earned by us upon execution of this Agreement, and is nonrefundable. If you fail or choose not to develop any Franchised Restaurant that is permitted under this Agreement, you will not be entitled to any return or refund of the Development Fee or any portion thereof.
Source: Item 23 — RECEIPTS (FDD pages 66–252)
What This Means (2024 FDD)
According to Crisp & Green's 2024 Franchise Disclosure Document, the specific amount of the Development Fee is detailed in a document called the Rider. This fee is paid in full when the Area Development Agreement is signed. While the Development Fee is required, developers are not required to pay an initial franchise fee for each Crisp & Green restaurant they develop under the Area Development Agreement.
The Development Fee serves as consideration for the Area Development Agreement itself, not for any individual Franchise Agreement. Once the Area Development Agreement is executed, Crisp & Green considers the Development Fee fully earned and it is nonrefundable. Therefore, if a developer fails to open all the Franchised Restaurants outlined in the Development Schedule, they will not receive a refund of the Development Fee or any portion of it.
In practical terms, this means a prospective Crisp & Green developer needs to carefully review the Rider to understand the full financial commitment required upfront. They should also assess their ability to meet the development schedule, as failure to do so could result in the loss of the Development Fee without the expected number of restaurants being opened. This is a common practice in area development agreements, where the initial fee secures the rights to a specific territory and development timeline.