Is the franchise fee deposit refundable for a Hawaiian Bros Island Grill franchise?
Hawaiian_Bros_Island_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
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The Development Agreement gives you the right and obligation to develop one or more Restaurants. You will sign a Franchise Agreement after you secure a suitable Restaurant site and have signed a lease for such site. You pay a $50,000 franchise fee deposit for the first Restaurant to be developed under the Development Agreement when you sign the Development Agreement. If you are granted development rights for additional Restaurants under the same Development Agreement, you must pay a franchise fee deposit equal to $25,000 for each additional Restaurant that you commit to develop when you sign the Development Agreement. The franchise fee deposit is fully earned in consideration of the development rights granted in the Development Agreement and is not refundable. The franchise fee deposit will be credited against the franchise fee due under the Franchise Agreement for the Restaurant to which it applies if you timely open the Restaurant. If you fail to timely open a Restaurant, you will forfeit the franchise fee deposit allocated to such Restaurant and it will become our property. You must pay the remaining balance of the franchise fee for a Restaurant upon signing a Franchise Agreement for that Restaurant.
If you purchase an existing franchise, you do not pay an initial franchise fee unless the term of the franchise agreement issued to you for the existing franchise is extended, in which case, a prorated non-refundable franchise fee may be charged based on our then-current initial franchise fee. In addition, if you purchase an existing franchise, you pay us a transfer fee (which is not refundable) of $10,000 for each existing Restaurant you purchase. We may require you to pay these transfer fees when you request approva
Source: Item 5 — INITIAL FEES (FDD pages 12–16)
What This Means (2025 FDD)
According to Hawaiian Bros Island Grill's 2025 Franchise Disclosure Document, the franchise fee deposit is generally not refundable. The initial franchise fee is $50,000 under a Franchise Agreement. If a franchisee signs a Development Agreement for multiple restaurants, a $50,000 franchise fee deposit is required for the first restaurant and $25,000 for each additional restaurant. This deposit is paid when the Development Agreement is signed.
The FDD states that the franchise fee deposit is fully earned in consideration of the development rights granted and is not refundable. However, the deposit will be credited against the franchise fee due under the Franchise Agreement if the restaurant opens on time. If the franchisee fails to open a restaurant in a timely manner, the franchise fee deposit allocated to that restaurant will be forfeited and become the property of Hawaiian Bros Island Grill.
Furthermore, the document states that all fees described in Item 5 are non-refundable. This includes the transfer fee of $10,000 required when purchasing an existing franchise. This policy of non-refundability is standard across all franchisees, with limited exceptions regarding reimbursements for wages, travel, and lodging related to New Restaurant Opening (NRO) assistance, which may vary based on specific market conditions and seasonality.