When are transfer fees collectable by Big Apple Bagels in Washington state?

According to Big Apple Bagels' 2025 Franchise Disclosure Document, transfer fees in Washington state are collectable only to the extent that they reflect the franchisor's reasonable estimated or actual costs in facilitating the transfer. This means Big Apple Bagels cannot charge an arbitrary or inflated transfer fee; the fee must be tied to the actual expenses they incur during the transfer process. This provision is specific to Washington due to state franchise laws.

For a prospective Big Apple Bagels franchisee in Washington, this is a beneficial protection. It prevents the franchisor from profiting excessively from franchise transfers. If a franchisee decides to sell their Big Apple Bagels location, the transfer fee they pay to the franchisor should be justifiable based on real costs, such as legal and administrative work.

It is important for franchisees to understand what constitutes 'reasonable estimated or actual costs.' Franchisees should request a detailed breakdown of the transfer fee to ensure it aligns with this standard. If the fee seems excessive, a franchisee could potentially challenge it under Washington's Franchise Investment Protection Act, as referenced elsewhere in Item 23. This act aims to protect franchisees from unfair practices.