Are there any limitations on transfer fees collectable by Belocal?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
. Transfer fees are collectable to the extent that they reflect the franchisor's reasonable estimated or actual costs in effecting a transfer.
- f. Pursuant to RCW 49.62.020, a noncompetition covenant is void and unenforceable against an employee, including an employee of a franchisee, unless the employee's earnings from the party seeking enforcement, when annualized, exceed $100,000 per year (an amount that will be adjusted annually for inflation).
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, there are limitations on the transfer fees that Belocal can collect. Specifically, transfer fees are collectable only to the extent that they reflect Belocal's reasonable estimated or actual costs incurred in facilitating the transfer. This means Belocal cannot charge arbitrary or excessive transfer fees; the fees must be tied to the actual expenses Belocal incurs during the transfer process.
Furthermore, if a Belocal franchisee seeks to transfer their franchise, they must pay Belocal a transfer fee equal to the then-current initial franchise fee that Belocal generally charges to new franchisees, in addition to Belocal's reasonable attorney's fees associated with the transfer. This policy ensures that Belocal is compensated for its time and expenses related to the transfer, while also preventing the franchisor from profiting excessively from the transfer itself.
It is important for prospective Belocal franchisees to understand these limitations on transfer fees, as they can significantly impact the financial implications of selling their franchise in the future. Franchisees should carefully review the franchise agreement and consult with an attorney to fully understand their rights and obligations regarding franchise transfers and associated fees. This also means that the transfer fee can vary over time, as the initial franchise fee for new franchisees may change.