How is the Golden Corral development fee calculated?
Golden_Corral Franchise · 2025 FDDAnswer from 2025 FDD Document
es and agrees that any such actions by or on behalf of Franchisor pursuant to its exercise of the Franchisor's Development Right are for the purpose of achieving the full development of a Golden Corral® restaurant within the Development Area at the earliest practicable date.
1.6.3. If Franchisor identifies and secures, by letter of intent, contract to purchase or lease agreement (hereinafter a "Land Contract"), a site within the Development Area that meets the then-current standards and site requirements established by Franchisor for development of a Golden Corral® restaurant, then Franchisor shall notify Area Developer that Franchisor has secured such site and provide on a confidential basis to Area Developer such information regarding such site as is then in the possession of Franchisor (the "Site Information"). The term "Site Information" expressly excludes any information or analysis developed by or for Franchisor containing any projected revenues or earnings with respect to the operation of a restaurant from such site (the "Excluded Information").
1.6.4. In addition to the Site Information, Franchisor shall furnish to Area Developer a summary of all fees, costs and expenses expended and incurred in connection with activities undertaken by Franchisor pursuant to exercising the Franchisor's Development Right (collectively, the "Site Development Costs"), which shall include but not be limited to, expenses related to the identification of such site, determination of the suitability of such site for development, and negotiation for the acquisition of such site with the owner or lessor thereof (which shall also include internal costs and expenses incurred by Franchisor together with fees and expenses paid or payable to any third party). The date on which Area Developer is in receipt of the Site Information and the summary of Site Development Costs is hereinafter referred to as the "Availability Date."
1.6.5. Provided that the seller or landlord under a Land Contract is willing to allow assignment of the Land Contract to Area Developer with a complete release of Franchisor and its parent and affiliates in connection therewith; Area Developer shall have a period of fourteen (14) days following the Availability Date (the "Notice Period") to examine such information for the purpose of determining Area Developer's desire and willingness to accept an assignment and assumption of any Land Contract and all other agreements, if any, entered into by Franchisor pursuant to exercising the Franchisor's Development Right (the "Related Agreements") according to their respective terms, and to perform fully all of the obligations of Franchisor under the Land Contract and the Related Agreements.
1.6.6. If Area Developer fails to affirmatively notify Franchisor in writing within the Notice Period of Area Developer's desire to accept an assignment and assumption of the Land Contract and the Related Agreements, then the Development Agreement shall be deemed automatically terminated as of the fifteenth (15th) day following
the Availability Date, and Area Developer shall have no further rights or privileges to develop or operate a Golden Corral® restaurant within the Development Area.
1.6.7. If, on the other hand, Area Developer gives notice in writing to Franchisor within the Notice Period of Area Developer's intention to accept an assignment and assumption of the Land Contract and the Related Agreements (the "Acceptance Notice"), such written notice shall also be deemed the agreement of Area Developer to reimburse Franchisor and its affiliates for all Site Development Costs and any and all subsequently incurred similar expenses in connection with the identification and development of the site. Upon Franchisor's receipt of the Acceptance Notice, Franchisor shall promptly deliver to Area Developer copies of the Land Contract, Related Agreements and such other documents as Franchisor shall deem reasonable and appropriate, on terms acceptable to Franchisor and in compliance with the provisions of such agreements, for the purpose of assigning Franchisor's or its parent's or affiliate's rights under all such agreements (the "Assignment Documents"), together with a Franchise Agreement with respect to such location.
1.6.8.
Source: Item 22 — CONTRACTS (FDD pages 84–85)
What This Means (2025 FDD)
Based on the 2025 Golden Corral Franchise Disclosure Document, the document outlines a process where Golden Corral may identify and secure a site for development within the Area Developer's territory. If Golden Corral secures a site, they will provide the Area Developer with Site Information and a summary of Site Development Costs. These Site Development Costs include expenses related to identifying the site, determining its suitability for development, and negotiating its acquisition, encompassing both internal costs incurred by Golden Corral and fees paid to third parties.
The Area Developer then has a period to review this information and decide whether to accept an assignment of the land contract. If the Area Developer chooses to proceed, they must notify Golden Corral and agree to reimburse them for all Site Development Costs, including any subsequently incurred expenses related to the site's identification and development. This reimbursement is in addition to the initial franchise fee required under the Franchise Agreement.
If the Area Developer fails to execute the necessary documents or pay the initial franchise fee and Site Development Costs within the specified Execution Period, their rights to the site are terminated. Golden Corral then has no obligation to proceed with the agreement and may terminate the Development Agreement. This arrangement ensures that Golden Corral is compensated for its efforts and expenses in securing and preparing a site for a new franchise location.