Why is the transfer fee payable to Antioch Pizza Shop?
Antioch_Pizza_Shop Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Indemnification | Will vary under circumstances | As incurred | You have to reimburse us if we are held liable for claims arising from your operation of the development business or incur costs in defending them. |
| Transfer Fee | Calculated as the total of 25% of the initial franchise fee currently being charged for a Dine-In or Take-Out Delivery Restaurant for each additional franchise to be developed under the Development Schedule as of the date of transfer. | At the time of transfer. | Payable if you transfer the MUDA to a third party to cover our costs and expenses incurred in connection with the transfer. |
Source: Item 7 — Estimated Initial Investment (FDD pages 17–24)
What This Means (2025 FDD)
According to Antioch Pizza Shop's 2025 Franchise Disclosure Document, the transfer fee is payable to the company to cover their costs and expenses incurred in connection with the transfer of the Multi-Unit Development Agreement (MUDA) to a third party. The transfer fee is calculated as 25% of the initial franchise fee currently charged for a Dine-In or Take-Out Delivery Restaurant for each additional franchise to be developed under the Development Schedule as of the date of transfer.
This means that if a franchisee decides to transfer their rights to develop multiple Antioch Pizza Shop locations to someone else, they will have to pay a fee to Antioch Pizza Shop. This fee is intended to compensate Antioch Pizza Shop for the administrative and legal work involved in approving the transfer and ensuring that the new franchisee is qualified and capable of fulfilling the development agreement.
For a prospective franchisee, this highlights the importance of carefully considering the terms of the Multi-Unit Development Agreement and the potential costs associated with transferring the agreement in the future. The fee can be substantial, especially if the agreement covers a large number of units, so it's crucial to understand the implications before signing the agreement.