Can the 'Transfer Review Fee' for a Bhc franchise assignment exceed $5,000.00?

According to Bhc's 2025 Franchise Disclosure Document, the 'Transfer Review Fee' can exceed $5,000.00. Specifically, the FDD states that the fee is $5,000.00, or such greater amount as is necessary to reimburse Bhc's out-of-pocket costs associated with the transfer/assignment, including attorney's fees. This means that while the base fee is $5,000.00, a franchisee could end up paying more if Bhc's costs, particularly legal fees, exceed that amount during the transfer process.

This has significant implications for a prospective Bhc franchisee looking to sell or transfer their franchise. It introduces uncertainty into the transfer costs, as the final fee will depend on Bhc's expenses. Franchisees should be aware that they may need to budget for more than just the stated $5,000.00 and should inquire about what factors might cause the fee to increase. Understanding the potential for additional costs is crucial for financial planning during a franchise transfer.

In the franchise industry, it is common for franchisors to charge transfer fees to cover their administrative and legal costs associated with reviewing and approving a transfer. However, the structure of the fee can vary. Some franchisors charge a fixed fee, while others, like Bhc, may charge a fee that covers their actual costs, potentially exceeding a stated base amount. This approach aims to ensure that the franchisor is fully compensated for their expenses, but it also places the risk of higher costs on the franchisee.

Therefore, a prospective Bhc franchisee should carefully consider the terms of the transfer agreement and understand the potential for the 'Transfer Review Fee' to exceed the stated $5,000.00. It would be prudent to discuss with Bhc what specific types of costs could cause the fee to increase and to request an estimate of these costs before initiating the transfer process. This will help the franchisee to make informed decisions and avoid unexpected expenses.