If the transferee is a limited partner of the franchisee, is the Beauty Bungalows transfer fee required?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
(e) Franchisee pays Franchisor a fee to transfer the Business (the "Transfer Fee") in the amount of $5,000, provided no Transfer Fee will be required if the transferee is:
(iii) one of the then-current members, shareholders or limited partners of Franchisee;
Source: Item 22 — CONTRACTS (FDD pages 47–48)
What This Means (2025 FDD)
According to Beauty Bungalows' 2025 Franchise Disclosure Document, a $5,000 transfer fee is generally required when a franchisee transfers their business. However, there are exceptions to this fee. Specifically, if the transferee is one of the then-current members, shareholders, or limited partners of the franchisee, the transfer fee is waived.
This means that if you, as a Beauty Bungalows franchisee, decide to transfer your franchise to an existing limited partner within your current business structure, you will not have to pay the $5,000 transfer fee. This can be a significant cost saving, especially if you are restructuring your business or bringing in a new partner who already has a stake in the franchise.
It is important to note that this waiver only applies if the transferee is already a limited partner at the time of the transfer. If you are bringing in a new limited partner who was not previously involved in the franchise, the transfer fee may still apply. Franchisees should carefully document the transferee's status as a limited partner to ensure the waiver is properly applied and should consult with Beauty Bungalows to confirm the specific requirements for waiving the transfer fee in their situation.