When are the additional initial franchise fees due for a Desi District Multi-Unit Development Agreement?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
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| Type of expenditure | Amount | Method of payment | When due | To whom payment is to be made |
|---|---|---|---|---|
| Office Expenses (see | $500 - $1,000 | Check, debit, and/or credit | As incurred | Vendors |
| Note 10) | ||||
| Inventory (see Note 11) | $20,000 - $40,000 | Check, debit, and/or credit | Upon ordering | Our Affiliate, Vendors |
| Licenses and Permits (see Note 12) | $1,000 - $2,000 | Check | Upon application | Government |
| Dues and Subscriptions (see Note 13) | $200 - $500 | Check, debit, and/or credit | As incurred | Vendors, trade organizations |
| Professional Fees | $1,500 - $4,000 | Check, debit, and/or credit | As incurred or when billed | Professional service firms |
| (lawyer, accountant, | ||||
| etc.) (see Note 14) | ||||
| Travel, lodging and | $3,000 - $6,000 | Cash, debit or credit | As incurred | Airlines, hotels, and restaurants |
| meals for initial training | ||||
| (see Note 15) | ||||
| Additional funds (for first 3 months) (see Note 16) | $75,000 - $100,000 | Varies | Varies | Employees, suppliers, utilities |
| Total | $669,200 - $1,020,500 | This is the total estimated initial investment to open and commence operating your initial location for the first three months (as described more fully in Chart A of this Item 7). See Note 3. |
YOUR ESTIMATED INITIAL INVESTMENT - MULTI UNIT DEVELOPMENT AGREEMENT
| Type of expenditure | Amount | Method of payment | When due | To whom payment is to be made |
|---|---|---|---|---|
| First franchise (see table above) | $669,200 - $1,020,500 | Varies | Varies | Varies |
| Type of expenditure | Amount | Method of payment | When due | To whom payment is to be made |
|---|---|---|---|---|
| Additional initial franchise fees (see Note 17) | $22,500 - $90,000 | Check or wire transfer | Upon signing the MUDA | Us |
| Business planning and miscellaneous expenses | $1,000 |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 20–26)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, the additional initial franchise fees for a Multi-Unit Development Agreement (MUDA) are due upon signing the MUDA. The amount of these fees ranges from $30,000 to $120,000, and the payment can be made via check or wire transfer. This fee is paid directly to Desi District.
This means that if a prospective franchisee enters into a Multi-Unit Development Agreement with Desi District, they must be prepared to pay the additional franchise fees upfront when the agreement is signed. This is in addition to the initial franchise fee for the first unit, which is detailed separately. The total initial investment for a Multi-Unit Development Agreement, including these additional fees, ranges from $1,043,333 to $2,628,000, encompassing the right to own between 2 and 5 locations.
The FDD also mentions a different set of figures for additional initial franchise fees, ranging from $22,500 to $90,000, also due upon signing the MUDA. It's important for potential franchisees to clarify with Desi District which fee schedule applies to their specific agreement and the number of units they plan to develop. Understanding the payment terms and amounts due upfront is crucial for managing the initial investment and ensuring sufficient capital is available when entering into a multi-unit development agreement with Desi District.