Besides the flat fee, what other fees might a Burros Fries franchisee have to pay when transferring?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
owners if an Entity, managers, directors or officers) must not operate a franchise, license another or operate businesses offering products and services similar to those offered by the Franchise;
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- We shall charge a flat transfer fee of ten thousand dollars ($10,000) to Franchisee when Franchisee transfers part or the entire Franchise Business upon our written consent (defined as all other transfers). The term "flat transfer fee" means that Franchisee shall pay this amount regardless of whether our actual cost to process the transfer is higher or lower than such amount. The flat transfer fee will include, but not be limited to, reasonable attorney's fees actually incurred, the cost of investigating the transferee and our administrative expenses (including employee salaries, sales staff commissions, travel costs, out of pocket costs properly attributable to the transfer). In addition, if the transferee was already in our lead database at the time of first contact between Franchisee and the
transferee, we may require Franchisee to pay a referral fee (which amount will be customary for the transaction), in addition to the flat $10,000 fee described above, plus the amount of any broker fees that we are responsible for paying to third parties (does not include our employees);
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to the 2024 Burros Fries Franchise Disclosure Document, a franchisee transferring their business may incur fees beyond the $10,000 flat transfer fee. If the transferee was already in Burros Fries's lead database when the franchisee first contacted them, Burros Fries may require the franchisee to pay a referral fee, the amount of which will be customary for the transaction. The franchisee might also have to cover any broker fees that Burros Fries is responsible for paying to third parties, excluding fees paid to Burros Fries employees.
Additionally, the transferee must pay for and successfully complete the training programs that Burros Fries requires of new franchisees. The cost for this training is $300 per person per half day, plus Burros Fries's expenses, which are subject to change over time.
These additional fees associated with transferring a Burros Fries franchise, such as referral fees, broker fees, and training costs for the transferee, can significantly increase the financial burden on the franchisee during the transfer process. It is important for prospective franchisees to understand these potential costs and factor them into their financial planning when considering a transfer.