Where in the Monicals Pizza Development Agreement are the franchise fees and development fee discussed?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
ressly forbidden by this Development Agreement.
3. DEVELOPMENT FEE AND FRANCHISE FEES
3.1 Franchise Fees
Simultaneously, with the execution of this Development Agreement, Developer shall execute the Initial Franchise Agreement and shall pay a Franchise Fee of THIRTY THOUSAND DOLLARS ($30,000.00) for the first Monical's Restaurant to be developed pursuant to this Development Agreement. Developer shall execute Franchise Agreements for the additional Monical's Restaurants to be developed on a periodic basis, and shall pay a Franchise Fee of THIRTY THOUSAND DOLLARS ($30,000.00) for each additional Monical's Restaurant upon execution of each additional Franchise Agreement.
3.2 Development Fee
Upon the execution of this Development Agreement, Developer shall pay a fee ("Development Fee") equal to FIFTEEN THOUSAND DOLLARS ($15,000.00) multiplied by the number of Monical's Restaurants to be developed after the first Monical's Restaurant pursuant to this Development Agreement. The total amount of the Development Fee to be paid by Developer upon the execution of this Development Agreement is __________________________ THOUSAND DOLLARS ($__________). The Development Fee is fully earned by Franchisor and is nonrefundable; provided, however, that Franchisor shall credit FIFTEEN THOUSAND DOLLARS ($15,000.00) of the Development Fee against the Franchise Fee for the second (2nd) and each subsequent Monical's Restaurant opened pursuant to, and in accordance with, this Development Agreement, such that the balance due on the Franchise Fee for any Monical's Restaurant included in the calculation of the Development Fee shall be FIFTEEN THOUSAND DOLLARS ($15,000.00), until such credits equal the Development Fee. In no event shall Franchisor issue an aggregate amount of credit greater than the amount of the Development Fee.
4.
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to Monicals Pizza's 2025 Franchise Disclosure Document, the franchise fees and development fee are detailed in Section 3 of the Development Agreement. Specifically, Section 3.1 discusses the franchise fees, stating that a fee of $30,000 is required for the first Monicals Pizza restaurant and each additional restaurant developed under the agreement. Section 3.2 outlines the development fee, which is $15,000 multiplied by the number of Monicals Pizza restaurants to be developed after the first one.
Notably, the development fee is fully earned by the franchisor and is nonrefundable. However, Monicals Pizza will credit $15,000 of the development fee against the franchise fee for the second and subsequent restaurants opened, effectively reducing the franchise fee balance to $15,000 until the total credits equal the development fee. The agreement clarifies that the franchisor will not issue credit exceeding the total development fee amount.
This fee structure has significant implications for developers. The initial investment includes both a franchise fee for the first location and a development fee based on the number of planned additional locations. While the development fee is partially credited back against future franchise fees, it represents a substantial upfront cost. Prospective franchisees should carefully consider their development plans and financial resources to ensure they can meet these initial obligations. Understanding the conditions and limitations on the development fee credit is also crucial for financial planning.