When does the Lead Fee not apply to a Beauty Bungalows franchise transfer?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding the foregoing, the Lead Fee will not apply if the transferee is an existing franchisee of Franchisor;
(h) in the case of a sale to a qualified third-party pursuant to a bona fide written offer, the provision of Sections 14.07 and 14.09 have been satisfied and Franchisee provides Franchisor with a copy of the signed purchase agreement and related documents as reasonably requested by Franchisor and proof of payment of purchase price in a format specified by Franchisor;
(i) the proposed transferee executes a separate franchise agreement with Franchisor, using the then-current form of franchise agreement;
(j) the proposed transferee pays for, attends, and satisfactorily completes the training program for new franchisees unless:
(i) the transferee is a current franchisee in good standing in the System, or
(ii) the transferee is and has been a Manager for a period of one year or more of a Franchise in good standing;
Source: Item 22 — CONTRACTS (FDD pages 47–48)
What This Means (2025 FDD)
According to Beauty Bungalows' 2025 Franchise Disclosure Document, the Lead Fee, which compensates Beauty Bungalows for the lost opportunity of granting a new franchise to a lead, does not apply under certain conditions related to franchise transfers. Specifically, the Lead Fee is waived if the transferee is an existing Beauty Bungalows franchisee.
Additionally, the Lead Fee is waived if specific conditions are met in the case of a sale to a qualified third party. These conditions include satisfying the provisions of Sections 14.07 and 14.09 of the franchise agreement, providing Beauty Bungalows with a copy of the signed purchase agreement and related documents as reasonably requested, and providing proof of payment of the purchase price in a format specified by Beauty Bungalows.
Furthermore, the Lead Fee is waived if the proposed transferee executes a separate franchise agreement with Beauty Bungalows, using the then-current form of franchise agreement. The Lead Fee is also waived if the proposed transferee pays for, attends, and satisfactorily completes the training program for new franchisees, unless the transferee is either a current franchisee in good standing within the Beauty Bungalows system or has been a Manager for a period of one year or more of a Beauty Bungalows franchise in good standing.