For an Extreme Art Studio franchise, when is the architect fee due?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Expenditure (1) | Amount | Method of Payment | When Due | To Whom Payment is to be Paid(1) | |
|---|---|---|---|---|---|
| Low | High | ||||
| Architect(19) | $5,000 | $12,000 | As Incurred | As Incurred | Approved Suppliers |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 18–23)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio Franchise Disclosure Document, the architect fee, which ranges from $5,000 to $12,000, is due as incurred. This means that the franchisee will need to pay the approved architect as the architectural services are provided during the design and build-out phase of the studio.
This 'as incurred' payment schedule is common in franchise setups, particularly for services related to construction and setup. It allows franchisees to manage their cash flow by paying for services as they are received rather than upfront. However, it also means that franchisees must budget carefully and have funds available throughout the build-out process to cover these costs.
Prospective Extreme Art Studio franchisees should confirm with the franchisor which suppliers are approved and understand the scope of services covered by the architect's fee. If the studio requires additional architectural work beyond the standard four-page plan, additional fees may apply, which could increase the overall initial investment.