Is the initial franchise fee for Ella Cafe refundable?
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.
Initial Inventory
Before opening your Ella Coffee House, you must purchase your Initial Inventory Package from us. The Initial Inventory Package includes, among other things, the initial proprietary coffee, supplies, branded paper products, and merchandise necessary to open your Coffee House. The current cost of the Initial Inventory Package ranges from $24,600 to $53,000. This cost is nonrefundable and payable when you submit your purchase order.
Except as described in this Item 5, all fees are uniformly imposed on new franchisees receiving this offering.
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 generally non-refundable. Specifically, the initial franchise fee of $49,500 is uniformly calculated for all franchisees and is non-refundable upon payment.
If a franchisee signs a Multi-Unit Development Agreement (MUDA) for developing more than one Ella Cafe location, a development fee is required. This fee is also nonrefundable upon payment. The MUDA requires a minimum of three units to be developed. For example, developing three Ella Coffee Houses would incur a Development Fee of $104,000, calculated as $49,500 for the first unit, $30,000 for the second, and $25,000 for the third.
Furthermore, the initial inventory package, which includes proprietary coffee, supplies, branded paper products, and merchandise, is also nonrefundable. The cost of this package ranges from $24,600 to $53,000 and is payable when the franchisee submits their purchase order. Therefore, prospective Ella Cafe franchisees should be aware that these initial costs are non-refundable, representing a significant financial commitment.