Is the Beauty Bungalows transfer fee waived if the transferee is a child of the franchisee?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
rom all claims that may be brought by you or any principal;
- (d) The Transfer is of all rights between Franchisee (or Franchisee's affiliate) and Franchisor (or Franchisor's affiliate) related to this Agreement;
- (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:
- (i) a corporation of which Franchisee is the majority stockholder, or a child, parent, sibling or spouse of Franchisee (or the individual owners of Franchisee if Franchisee is an entity);
- (ii) an entity created by Franchisee (or the individual owners of Franchisee if Franchisee is an entity) for estate planning purpose
Source: Item 22 — CONTRACTS (FDD pages 47–48)
What This Means (2025 FDD)
According to Beauty Bungalows's 2025 Franchise Disclosure Document, under certain conditions, the $5,000 transfer fee is waived. Specifically, if the transfer is to a child of the franchisee (or the individual owners of the franchisee if the franchisee is an entity), no transfer fee is required. This provision aims to facilitate succession within the franchisee's family without incurring additional costs.
This waiver of the transfer fee can be a significant benefit for Beauty Bungalows franchisees who plan to pass their business on to their children. It reduces the financial burden associated with transferring ownership and ensures a smoother transition. However, it is important to note that other conditions for the transfer must still be met, such as settling outstanding accounts and obtaining the franchisor's approval.
It is also worth noting that this waiver is not unique to Beauty Bungalows. Many franchise systems offer similar provisions to encourage family succession. Prospective franchisees should carefully review the transfer terms in the Franchise Agreement to understand all the requirements and conditions for transferring their Beauty Bungalows franchise, whether to a family member or another party.
In addition to a child, the transfer fee is also waived if the transferee is a corporation where the franchisee is the majority stockholder; an entity created by the franchisee for estate planning purposes where the franchisee is the managing member or general partner; or one of the then-current members, shareholders, or limited partners of the franchisee.