What is the initial franchise fee for an Ella Cafe franchise?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchise Fee
When you sign your franchise agreement, you must pay us $49,500 as the initial franchise fee ("Initial Franchise Fee"). The initial franchise fee is uniformly calculated for all franchisees and is non-refundable upon payment.
Multi-Unit Development Fee
If we award you multi-unit development rights to develop more than one Coffee House, you must sign our Multi-Unit Development Agreement ("MUDA") in the form attached as Exhibit C to this disclosure document. The minimum number of units required to develop Coffee Houses under the MUDA is three (3) units. Currently, we offer a reduction of your Initial Franchise Fee to $30,000 for your second franchise developed after the first franchised unit; your third franchise developed will be $25,000. Each initial franchise fee for each additional franchise developed after the third franchised unit is $20,000. For example, if you elect to development three Coffee Houses, the Development Fee will be $104,000 calculated as $49,500 + $30,000 for the second unit + $25,000 for the third unit. We reserve the right to cancel or modify any incentive program or discount at any time, provided you execute the MUDA simultaneously with the execution of your first franchise agreement.
When you sign the MUDA, you will sign the Franchise Agreement for the first Coffee House, and we will credit the applicable portion of the Development Fee to satisfy payment in full for the related initial franchise fee. When you sign each additional Franchise Agreement under the MUDA, we will credit the applicable portion of your Development Fee to satisfy payment in full for the related initial franchise fee. The Development Fee is calculated uniformly for all franchisees and is nonrefundable upon payment.
Source: Item 5 — INITIAL FEES (FDD pages 9–10)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, the initial franchise fee is $49,500. This fee is due when the franchise agreement is signed. The FDD specifies that this fee is uniformly calculated for all franchisees. It is also non-refundable upon payment. This means that once the fee is paid, it will not be returned to the franchisee under any circumstances.
For franchisees interested in developing multiple Ella Cafe locations, the company offers a reduced initial franchise fee for subsequent locations under a Multi-Unit Development Agreement (MUDA). The minimum number of units required under the MUDA is three. The initial franchise fee is reduced to $30,000 for the second franchise and $25,000 for the third franchise. Each additional franchise after the third will have an initial franchise fee of $20,000. For example, the development fee for three locations would total $104,500, calculated as $49,500 for the first unit, $30,000 for the second, and $25,000 for the third.
It is important to note that Ella Cafe reserves the right to cancel or modify any incentive programs or discounts at any time. To take advantage of the multi-unit development fee discounts, the MUDA must be executed simultaneously with the first franchise agreement. The applicable portion of the development fee will be credited to satisfy the initial franchise fee for each franchise agreement signed under the MUDA. Like the standard initial franchise fee, the development fee is calculated uniformly for all franchisees and is nonrefundable upon payment.
In addition to the initial franchise fee, prospective franchisees should also be aware of other initial costs, such as the initial inventory package, which ranges from $24,600 to $53,000. This package includes proprietary coffee, supplies, branded paper products, and merchandise necessary to open the coffee house. This cost is also nonrefundable and payable when the purchase order is submitted.