When are all franchise fees due when signing a Multi-Unit Development Agreement for a Desi District franchise?
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 - $5,000 | Check | As incurred | Vendors and suppliers |
| Total | $692,700 - $1,115,500 | This is the total estimated initial investment to enter into a M |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 20–26)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, when signing a Multi-Unit Development Agreement (MUDA), the additional initial franchise fees are due upon signing the MUDA. The amount of these additional initial franchise fees ranges from $22,500 to $90,000 or $30,000 to $120,000.
Specifically, Note 17 states that the initial franchise fees are reduced to $30,000 for the second and each additional franchise when signing a Multi-Unit Development Agreement for three to five franchises. All franchise fees are payable upon signing the MUDA.
This means that a prospective Desi District franchisee entering into a multi-unit development agreement will need to have the full amount of these franchise fees available at the time of signing the agreement. This is a significant upfront cost to consider in addition to other initial investment expenses.