Besides the transfer fee, what other costs may Bombs Away Franchising charge the franchisee for a transfer?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
hisee's business skill, financial capacity, personal character, experience, and business ability. Accordingly, Franchisee shall not conduct or undergo a Transfer without providing Bombs Away Franchising at least 60 days prior notice of the proposed Transfer, and without obtaining Bombs Away Franchising's consent. In granting any such consent, Bombs Away Franchising may impose conditions, including, without limitation, the following:
- (i) Bombs Away Franchising receives a transfer fee equal to $7,500 plus any broker fees and other out-of-pocket costs incurred by Bombs Away Franchising;
- (ii) the proposed assignee and its owners have completed Bombs Away Franchising's franchise application processes, meet Bombs Away Franchising's then-applicable standards for new franchisees, and have been approved by Bombs Away Franchising as franchisees;
- (iii) the proposed assignee is not a Competitor;
- (iv) the proposed assignee executes Bombs Away Franchising's then-current form of franchise agreement and any related documents, which form may contain materially different provisions than this Agreement (provided, however, that the proposed assignee will not be required to pay an initial franchise fee);
- (v) all owners of the proposed assignee provide a guaranty in accordance with Section
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, if a franchisee wishes to transfer their franchise, Bombs Away Franchising may impose certain conditions in granting consent to the transfer. In addition to a transfer fee of $7,500, Bombs Away Franchising may also charge the franchisee for broker fees and any other out-of-pocket costs they incur during the transfer process.
Bombs Away also stipulates other conditions that must be met for a transfer to be approved. The proposed assignee must complete Bombs Away's franchise application process, meet their standards for new franchisees, and be approved by Bombs Away. The assignee must not be a competitor and must execute Bombs Away's current franchise agreement, which may contain different provisions. All owners of the proposed assignee must provide a guaranty.
Furthermore, the franchisee must have paid all monetary obligations to Bombs Away and its affiliates, as well as to any lessor, vendor, supplier, or lender to the business. The franchisee must not be in default or breach of the Franchise Agreement or any other obligation owed to Bombs Away or its affiliates. These conditions ensure that Bombs Away maintains control over who becomes a franchisee and that all financial obligations are met before a transfer is completed.