To what extent are transfer fees collectable by Big Apple Bagels in Washington?

According to Big Apple Bagels' 2025 Franchise Disclosure Document, the ability to collect transfer fees in Washington is subject to certain limitations. Specifically, Big Apple Bagels can only collect transfer fees to the extent that those fees reflect the franchisor's reasonable estimated or actual costs associated with facilitating the transfer of the franchise. This means that the fees must be justifiable and directly related to the expenses Big Apple Bagels incurs during the transfer process.

This provision protects franchisees in Washington from excessive or arbitrary transfer fees. It ensures that Big Apple Bagels cannot profit unduly from franchise transfers but can only recover legitimate costs. This is a notable consumer protection compared to states without such specific regulations, where franchisors might have more leeway in setting transfer fee amounts.

For a prospective Big Apple Bagels franchisee in Washington, this means that any transfer fee charged must be transparent and based on actual or reasonably estimated costs. If a franchisee believes the transfer fee is excessive or not justified by actual costs, they may have grounds to challenge the fee under Washington state law. It would be prudent for potential franchisees to understand what constitutes 'reasonable estimated or actual costs' in the context of franchise transfers and to seek clarification from Big Apple Bagels regarding the breakdown of any transfer fees.

It is also important to note that Washington state law, specifically RCW 19.100.180, may supersede the Big Apple Bagels Franchise Agreement in areas of termination and renewal. Additionally, the Washington Franchise Investment Protection Act and other state laws may provide further protections and rights to franchisees, including the right to bring legal actions in Washington and the invalidation of certain waivers of rights. Therefore, franchisees should be aware of their rights under Washington law and consult with legal counsel to ensure full compliance and understanding.