What is the transfer fee for an Apricot Lane franchise?
Apricot_Lane Franchise · 2025 FDDAnswer from 2025 FDD Document
a controlling interest in the Franchised Business or the FRANCHISEE (a controlling interest being the largest ownership interest even if not a majority interest), or is one of a series of transfers which in the aggregate constitute or will effect such a transfer or a change in the controlling interest, all of the following conditions must be met prior to, or concurrently with, the effective date of the transfer:
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- FRANCHISOR must have declined its right of first refusal under Section 20.F below;
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- The transferee must have sufficient business experience, aptitude and financial resources to operate the Franchised Business in the judgment of FRANCHISOR;
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- FRANCHISEE must pay all amounts owed to FRANCHISOR or to any of its affiliates, which are then owed and unpaid;
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- The transferee and its proposed managers must complete FRANCHISOR's training program to FRANCHISOR's satisfaction;
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- The transferee must, at FRANCHISOR's election, either assume this Agreement in writing or execute FRANCHISOR's then-current standard franchise agreement (which may provide for higher fees, expenditures, duration, and different rights and obligations than are provided in this Agreement), provided, however, that the term thereof shall not be greater than the remaining term of this Agreement;
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- FRANCHISEE or the transferee must pay FRANCHISOR a transfer fee of Thirty Thousand Dollars ($30,000);
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- FRANCHISEE and its owners must execute a general release, in form satisfactory to FRANCHISOR, of any and all claims, whether known or unknown, against FRANCHISOR, any affiliates of FRANCHISOR and their respective shareholders, officers, directors, employees, agents, successors and assigns;
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- FRANCHISOR must approve the material terms and conditions of the transfer, including, without limitation, that the price and terms of payment are not so burdensome as to affect adversely the operation of the Franchised Business by the transferee, which approval shall not be unreasonably withheld;
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- If any part of the sale price of the transferred interest is financed, the transferor must agree that all obligations of the transferee under or pursuant to any promissory note, agreements or security interests reserved by the transferor in the assets of the Franchised Business or the Premises shall be subordinate to the obligations of the transferee to pay fees, and other amounts due to FRANCHISOR and its affiliates; and
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Source: Item 23 — RECEIPTS (FDD pages 51–222)
What This Means (2025 FDD)
According to Apricot Lane's 2025 Franchise Disclosure Document, a franchisee must pay a $30,000 transfer fee to the franchisor when transferring the franchise to a new owner. This fee is just one of several conditions that must be met for the transfer to be approved.
Other conditions include the franchisor declining their right of first refusal, the transferee demonstrating sufficient business experience and financial resources, and the transferee completing Apricot Lane's training program. Additionally, all outstanding amounts owed to Apricot Lane must be paid, and the transferee must either assume the existing franchise agreement or execute the franchisor's current standard agreement.
The transferor (the current franchisee) must also execute a general release of claims against Apricot Lane and a noncompetition covenant. The franchisor must approve the terms of the transfer, ensuring they do not adversely affect the business's operation under the new owner. If the sale is financed, the transferor's obligations must be subordinate to the transferee's obligations to pay fees to Apricot Lane.
It is important to note that transfer fees are collectable only to the extent that they reflect the franchisor's reasonable estimated or actual costs in facilitating the transfer. This means that the $30,000 fee should be in line with the actual expenses Apricot Lane incurs during the transfer process.