How is the development fee determined for a Monicals Pizza Development Agreement?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
You must pay a development fee if and when you sign a Development Agreement. The development fee is paid to us in a lump sum and is nonrefundable. The development fee is equal to $15,000 for each Monical's restaurant you agree to develop in addition to the franchise fee. The number of Monical's restaurants you will open will be determined before you sign the Development Agreement.
For example, assuming you agree to develop 5 Monical's restaurants, your initial investment will include a franchise fee of $30,000 for the first Monical's restaurant and a development fee of $60,000 for the remaining 4 Monical's restaurants to be developed in the future.
Each time you sign a Franchise Agreement for one of the additional Monical's restaurants, you must pay us $15,000 which is the balance of the discounted franchise fee for that franchise.
The development fee is calculated uniformly for all developers, but the amount of the actual fee will vary based on the number of Monical's restaurants you agree to develop.
Source: Item 5 — INITIAL FEES (FDD pages 9–10)
What This Means (2025 FDD)
According to the 2025 FDD, Monicals Pizza requires a development fee for each restaurant a developer agrees to open beyond the first one. This fee is $15,000 per restaurant. The total number of restaurants the developer commits to opening is determined before signing the Development Agreement. This fee is paid in a lump sum and is nonrefundable.
For instance, if a developer commits to opening five Monicals Pizza restaurants, they would pay a $30,000 franchise fee for the first restaurant and a $60,000 development fee for the remaining four. Each time the developer signs a Franchise Agreement for one of the additional restaurants, they must pay Monicals Pizza $15,000, representing the balance of the discounted franchise fee for that location.
The development fee calculation is uniform for all developers, but the actual amount varies based on the number of restaurants the developer agrees to develop. This structure incentivizes developers to commit to multiple locations upfront, aiding Monicals Pizza in expanding its brand presence.
Monicals Pizza will credit $15,000 of the development fee against the franchise fee for the second and each subsequent Monical's Restaurant opened under the Development Agreement. This means the balance due on the franchise fee for any Monical's Restaurant included in the development fee calculation will be $15,000 until the credits equal the development fee. However, Monicals Pizza will not issue an aggregate amount of credit greater than the amount of the development fee.