What is the formula for calculating the Transfer Fee charged by Beauty Bungalows?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
hall promptly notify us in writing and send us an executed copy of the contract of transfer. We shall have the right and option, exercisable within thirty (30) days after actual receipt of such notification or of the executed contract of transfer which shall describe the
Source: Item 23 — RECEIPTS (FDD pages 48–177)
What This Means (2025 FDD)
According to Beauty Bungalows' 2025 Franchise Disclosure Document, the Transfer Fee is calculated as $5,000 multiplied by the number of Franchised Businesses being transferred, plus any third-party broker or agency fees incurred by Beauty Bungalows as a result of the transfer. This fee is charged when a franchisee seeks to transfer their rights under the Franchise Agreement to a third party.
Beauty Bungalows retains the right of first refusal, meaning that if a franchisee receives an offer from a third party to buy the franchise, the franchisee must first offer Beauty Bungalows the opportunity to purchase the franchise on the same terms. This allows Beauty Bungalows to maintain control over who enters their franchise system.
The Transfer Fee compensates Beauty Bungalows for their time and expenses associated with reviewing and approving the transfer. The inclusion of broker or agency fees in the transfer fee indicates that Beauty Bungalows may use third-party services to facilitate the transfer process, and the franchisee will be responsible for covering these costs in addition to the base transfer fee. This is a fairly standard practice in franchising, as franchisors need to ensure that any new franchisee meets their standards and is a good fit for the brand.