Under what circumstances is there no transfer fee charged by Baya Bar?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
| (1) | (2) | (3) | (4) |
|---|---|---|---|
| Fees (1) | Amount | Due Date | Remarks |
| Insufficient Funds Fee | $50 per occurrence | On demand, if incurred | Payable if there are insufficient funds in your account to pay fees due to us. If you incur three insufficient funds fees in any 12-month period, we have the right to terminate your Franchise Agreement. |
| Collections Costs | Reimbursement of our reasonable costs (not to exceed $250) | As incurred | Payable if we incur costs (including reasonable attorney's fees) in attempting to collect amounts you owe to us. |
| Transfer Fee – Transfer Between Owners | $2,500 | With request for approval of transfer | For any transfer of ownership interests or shares between the owners of the franchise, or if you are adding a new owner (as long as majority ownership does not change) |
| Transfer Fee | $10,000 | Upon completion of the transfer | No fee charged for a one time transfer from individual(s) to a corporate entity formed for convenienc |
Source: Item 6 — OTHER FEES (FDD pages 11–16)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, a franchisee may be exempt from paying a transfer fee under specific conditions. The standard transfer fee is $10,000, but this fee is waived for a one-time transfer from individual owners to a corporate entity.
This exception applies only when the corporate entity is formed for the convenience of ownership of the Baya Bar franchise. This means that if the original individual owners decide to structure their business as a corporation for legal or tax reasons, they can transfer the franchise to the corporation without incurring the $10,000 transfer fee.
It is important for prospective Baya Bar franchisees to understand the specific conditions under which transfer fees are waived, as outlined in the FDD. If a franchisee plans to transfer ownership for reasons other than forming a corporation for convenience of ownership, or if it is not a one-time transfer, the $10,000 fee will apply. Franchisees should consult with Baya Bar and legal counsel to ensure they meet the requirements for the fee waiver.