What transfer fee does Baya Bar charge for a standard transfer to a new franchisee?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
te to the transferee's obligations to Franchisor; and
- 16.3.9 If consent is required, the lessor of the Franchised Business's premises consents to the assignment or further sublet of the premises to the transferee.
- 16.4 Transfer Fee. As a condition to any Transfer, Franchisee shall pay Franchisor a transfer fee equal to seventy-five percent (75%) of the then-current initial franchise fee; provided however, (i) for transfers to an existing franchisee in good standing with Franchisor, the transfer fee is fifty percent (50%) of the then-current initial franchise fee, (ii) for transfers of ownership interest among existing shareholders or members, or to add a new shareholder or member, of the Franchisee entity and such transfer does not change management control of the Franchisee entity, the transfer fee is Two Thousand Five Hundred Dollars ($2,500.00),
Source: Item 22 — CONTRACTS (FDD page 56)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, a standard transfer of a franchise to a new franchisee requires a transfer fee. This fee is equal to seventy-five percent (75%) of the then-current initial franchise fee.
However, the FDD outlines a few exceptions to this standard transfer fee. If the transfer is to an existing Baya Bar franchisee in good standing, the transfer fee is reduced to fifty percent (50%) of the then-current initial franchise fee. Additionally, transfers of ownership interest among existing shareholders or members, or to add a new shareholder or member, where management control of the franchisee entity does not change, incur a transfer fee of $2,500.00. A transfer to a spouse, parent, or child upon the death or permanent disability of the franchisee or franchisee's principal also incurs a transfer fee of $2,500.00.
For a prospective franchisee, it's important to understand these transfer fee implications. If they later decide to sell their Baya Bar franchise, the transfer fee will impact their net proceeds from the sale. The amount of the initial franchise fee at the time of the transfer will determine the transfer fee, so it is important to understand what the initial franchise fee is at that time. Also, it is important to note that these fees are subject to change in future FDDs.