What happens to the Aplus transfer fee if a two-partner partnership dissolves?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
Note 4: With respect to any of the following types of transfer, the Transfer Fee shall be reduced:
- (1) Transfer from a sole proprietor to a wholly owned corporation, limited liability company, or other corporate entity (a "Corporate Entity") in which 100% of the shares or ownership interest of the Corporate Entity is held by the former sole proprietor.
- (2) Transfer to a Corporate Entity where there are only two shareholders, members, partners, or stakeholders (each referred to herein as an "Owner") and you will be the 51% Owner.
- (3) Transfer of the minority stock of a Corporate Entity with multiple Owners with one Owner being the 51% majority Owner. One person must retain 51% ownership of the Corporate Entity.
- (4) The dissolution of a two-partner partnership or a two-Owner Corporate Entity resulting in one of the former partners or Owners remaining as a sole proprietor
Source: Item 6 — OTHER FEES (FDD pages 16–28)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, the transfer fee is reduced when a two-partner partnership dissolves and one of the former partners remains as a sole proprietor. This reduction in the transfer fee can be a significant benefit for franchisees in such situations, as it lowers the cost associated with restructuring the business.
This provision is designed to ease the financial burden on franchisees during partnership dissolutions, recognizing that these transitions can be challenging. By reducing the transfer fee, Aplus supports the continuity of the franchise under new ownership structures, provided that one of the original partners remains involved as a sole proprietor.
It is important for prospective Aplus franchisees to understand the specific conditions under which the transfer fee is reduced, as outlined in the FDD. Franchisees should consult with Aplus and legal counsel to ensure they meet all requirements and to fully understand the implications of partnership dissolutions and transfer fee reductions.