When is the rent and lease security deposit due for a Desi District franchise?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of expenditure | Amount | Method of payment | When due | To whom payment is to be made | |
|---|---|---|---|---|---|
| Initial franchise fee (see | $30,000 - | $30,000 | Check or wire transfer | Upon signing the franchise agreement | Us |
| Note 1) | |||||
| Rent and Lease Security | $5,000 - | $30,000 | Check | Upon signing lease | Landlord |
| Deposit (see Note 2) |
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- Our estimates in this table assume you pay one month rent plus a security deposit before you open for business. For this to occur, you would need to negotiate a "free rent" period for the time it takes to build out your business. We expect that you will rent your location. If you choose to purchase real estate instead of renting, your costs will be significantly different.
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- The Franchise Fee is due and payable at the time of executing the Franchise Agreement. Your lease security deposit and utility deposits will usually be refundable unless you owe money to the landlord or utility provider. None of the other expenditures in this table will be refundable. Neither we nor any affiliate finances any part of your initial investment. Each of these investment ranges varies depending on the type of franchise model you invest in. The Eatery model is a smaller footprint and operates as only a restaurant business. The Eatery and Market Model is a combination of restaurant and grocery business and requires a larger footprint and as a result more of an investment to open. In this Item 7, the lower end of the investment range generally accounts for the Eatery model and the higher end of the range of investment accounts for the Eatery and Market model.
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 rent and lease security deposit, which ranges from $5,000 to $30,000, is due upon signing the lease. Payment is to be made directly to the landlord via check.
Desi District estimates that this amount covers one month's rent plus a security deposit to be paid before the business opens. The FDD notes that franchisees may be able to negotiate a 'free rent' period to cover the time needed to build out the location. The document also assumes that franchisees will rent their location, and clarifies that purchasing real estate instead of renting will significantly alter these costs.
It is important to note that the lease security deposit is typically refundable, provided the franchisee does not owe money to the landlord. This contrasts with other initial expenditures, which Desi District states are generally non-refundable. Prospective franchisees should carefully review the lease terms and negotiate favorable conditions to minimize upfront costs and potential risks.