When is the Kitchen Solvers Initial Franchise Fee considered earned?
Kitchen_Solvers Franchise · 2025 FDDAnswer from 2025 FDD Document
- A. Initial Franchise Fee. You must pay to us a non-refundable Initial Franchise Fee in the amount set forth in Appendix B to this Agreement. The Initial Franchise Fee, payable in full on the date you sign this Agreement, is earned upon receipt, and is in consideration for our expenses incurred and services included in granting you franchise rights.
Source: Item 22 — Contracts (FDD page 49)
What This Means (2025 FDD)
According to Kitchen Solvers' 2025 Franchise Disclosure Document, the initial franchise fee is considered earned upon receipt. The franchisee must pay the initial franchise fee in full when signing the Franchise Agreement. This fee is non-refundable. Kitchen Solvers considers the initial franchise fee as compensation for the expenses they incur and the services they provide when granting the franchise rights to the franchisee.
This means that once Kitchen Solvers receives the initial franchise fee, it is considered earned and is non-refundable, regardless of whether the franchisee's business becomes operational or not. This is a common practice in franchising, as the franchisor incurs costs in evaluating the franchisee, providing initial training, and setting up the franchisee with the necessary resources.
Prospective Kitchen Solvers franchisees should understand that the initial franchise fee is a sunk cost. It is essential to conduct thorough due diligence before signing the Franchise Agreement and paying the fee, as it will not be returned even if the franchisee decides not to proceed with the business or if the franchise is terminated.