What risk does a Kitchen Solvers franchisee accept, including the risk of loss of investment?
Kitchen_Solvers Franchise · 2025 FDDAnswer from 2025 FDD Document
2. DEVELOPMENT FEE.
2.1 Development Fee. You shall pay to us a "Development Fee" in the amount designated in Exhibit A immediately upon execution of this Agreement. The Development Fee is paid to us in consideration of the rights we grant you pursuant to this Agreement. Accordingly, the Development Fee is deemed fully earned by us upon execution of this Agreement and is nonrefundable, even if you fail to develop one or more of the Businesses.
1.5 Non-Public Access Venues; Multi-Project Customers.
- 1.5.1 We have the right to develop, open and operate, and to license others the right to develop, open and operate, Businesses located in Non-Public Access Areas, including within the Development Area. For purposes of this Agreement, the term Non-Public Access Area shall mean military bases, government institutions, and other areasthat are not accessible to the general public.
- 1.5.2 We and/or our affiliates reserve the right to negotiate and enter into agreements with "Multi-Project Customers" and to, directly or indirectly (including through franchisees and licensees) provide KITCHEN SOLVERS® services under the Marks, even if those customers are located in the Development Area. The term "Multi-Project Customer" means a customer that wishes to contract for the completion of fifty or more projects for KITCHEN SOLVERS® services, including, without limitation owners or managers of apartment and/or condominium buildings, residential home builders and/or developers, and hotel chains. We may provide such services to Multi-Project Customers ourselves or through an affiliate, or we may contract with a
third-party including another KITCHEN SOLVERS® franchisee, to perform such services in the Development Area without providing you with any compensation. If you qualify to service a Multi-Project Customer and we offer you the option to perform such work, you will be required to comply with our designated standards, specifications and procedures, and you may be required to enter into our then-current form of Multi-Project Customer Participation Agreement. We retain the right to set and modify the parameters for any Multi-Project Customer program, including the right to terminate your participation in the program, at any time.
Source: Item 23 — Receipts (FDD pages 49–190)
What This Means (2025 FDD)
According to Kitchen Solvers' 2025 Franchise Disclosure Document, a franchisee faces the risk of losing their development fee. The Development Fee, as stated in section 2.1, is paid to Kitchen Solvers in exchange for the rights granted in the agreement and is considered fully earned upon the agreement's execution. This fee is nonrefundable, regardless of whether the franchisee successfully develops one or more businesses. This means that if a franchisee is unable to proceed with the development of their Kitchen Solvers franchise, they will not be able to recover the initial development fee paid to the company.
Additionally, Kitchen Solvers retains the right to develop, operate, and license businesses in Non-Public Access Areas, such as military bases and government institutions, even within a franchisee's Development Area. Kitchen Solvers also reserves the right to negotiate and enter into agreements with Multi-Project Customers, which are customers wanting to contract for fifty or more projects. Kitchen Solvers can provide services to these customers directly or through affiliates, or contract with another Kitchen Solvers franchisee, without compensating the original franchisee, even if the customer is located in the franchisee's Development Area.
These stipulations mean that a Kitchen Solvers franchisee's business could be impacted by Kitchen Solvers directly servicing customers within their territory. The franchisee may not have any recourse to claim compensation for lost business in these situations. The franchisee is required to comply with Kitchen Solvers' standards and may be required to enter into a Multi-Project Customer Participation Agreement if they qualify to service a Multi-Project Customer. Kitchen Solvers also retains the right to modify or terminate a franchisee's participation in the Multi-Project Customer program at any time.