To whom are the additional initial franchise fees paid 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 |
|---|---|---|---|---|
| First franchise (see table above) | $1,012,333 - $2,503,000 | Varies | Varies | Varies |
| Additional initial franchise fees (see Note 17) | $30,000 - $120,000 | Check or wire transfer | Upon signing the MUDA | Us |
| Business planning and miscellaneous expenses | $1,000 - $5,000 | Check | As incurred | Vendors and suppliers |
| Total | $1,043,333 - $2,628,000 | This is the total estimated initial investment to enter into a Multi-Unit Development Agreement for the right to own a tot |
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 paid to "Us", meaning the franchisor, Desi District itself. These fees, which range from $30,000 to $120,000, are due upon signing the MUDA and can be paid via check or wire transfer. This payment covers the right to develop multiple Desi District locations, specifically between two and five units.
For a prospective franchisee, this means that in addition to the initial franchise fee for the first unit, there's a separate fee to secure the rights for future locations under a development agreement. This upfront investment grants the franchisee the opportunity to expand their Desi District presence within a defined territory and timeframe. The amount varies based on the number of units included in the agreement.
It's important to note that this additional initial franchise fee is non-refundable, as indicated in Note 1 of Item 7. Therefore, potential franchisees should carefully consider their development plans and financial capabilities before entering into a Multi-Unit Development Agreement with Desi District. Understanding the terms and obligations outlined in the MUDA is crucial to making an informed investment decision.