How is the total Buyout Fee calculated for a 1 800 Packouts franchise?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
except as set forth in Section -8 (our assumption of management)) following our exercise of any of these rights. If we exercise any of our rights under Section C., we may thereafter terminate this Agreement without providing you any additional corrective or cure period, unless the default giving rise to our right to terminate this Agreement has been cured to our reasonable satisfaction.
E. BUYOUT
If you and we mutually agree to terminate this Agreement, and you are not at such time in material breach of any of your obligations under this Agreement or any other agreement with us, you pay us all amounts owed prior to termination, you pay us the Buyout Fee described in this Section E and you and your Owners execute a general release, in a form prescribed by us, of any claims against us and our affiliates, and our and their officers, directors, agents and employees, we will waive the restriction in Section -1(a) prohibiting you and your Owners from directly or indirectly having any involvement in any Competitive Business after the termination of this Agreement. The "Buyout Fee" shall be equal to an initial franchise fee of Sixty Thousand Dollars ($60,000) plus an additional fee of Two-Thousand Five Hundred Dollars ($2,500) per month for each month remaining on the term of your franchise agreement. If the buyout option in this Section E is exercised, you and your Owners still will
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to the 2025 1 800 Packouts Franchise Disclosure Document, the Buyout Fee is calculated if you and 1 800 Packouts mutually agree to terminate the Franchise Agreement, and you are not in material breach of the agreement. You must also pay all outstanding amounts owed prior to termination and execute a general release of claims against 1 800 Packouts.
The Buyout Fee consists of an initial franchise fee of $60,000, plus an additional fee of $2,500 for each month remaining on the term of your franchise agreement. This fee allows you and your owners to be released from the restriction that prevents involvement in any competitive business after the termination of the agreement.
However, even if the buyout option is exercised, you and your owners are still restricted from soliciting for employment any person who has been employed by 1 800 Packouts, its affiliates, or any of its franchisees within the immediate past 12 months for a period of two years after the termination of the Agreement. This buyout option does not apply if the agreement is transferred to a new franchisee or if 1 800 Packouts terminates the Franchise Agreement for cause.