What is considered 'Transfer Consideration' for an Aplus franchise transfer?

According to Aplus's 2024 Franchise Disclosure Document, "Transfer Consideration" is defined as the total transfer price for the assignment of all businesses conducted at the franchised location. This total transfer price is then reduced by the consideration paid for the transfer of inventories at cost and equipment at fair market value. In simpler terms, it's the sale price of the Aplus franchise minus the value of the inventory and equipment.

This definition is important because Aplus uses the Transfer Consideration to calculate the transfer fee. The transfer fee is either a percentage of the Transfer Consideration or a minimum of $15,000, depending on the capital spent by Aplus on the premises lease or other agreements within the ten years before the transfer.

For a prospective Aplus franchisee, understanding this definition is crucial when considering selling their franchise. It directly impacts the amount of the transfer fee they will owe to Aplus. Franchisees should keep detailed records of inventory costs and equipment values to accurately calculate the Transfer Consideration and, consequently, the transfer fee.