What costs are included in the Burros Fries flat transfer fee?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
s 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).
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to Burros Fries's 2024 Franchise Disclosure Document, a franchisee who transfers their franchise business will be charged a flat transfer fee of $10,000. This fee applies whether the actual cost to process the transfer is higher or lower than this amount.
The flat transfer fee covers several specific expenses that Burros Fries may incur during the transfer process. These include reasonable attorney's fees that are actually incurred, the cost of investigating the proposed transferee to ensure they meet Burros Fries's standards, and Burros Fries's administrative expenses related to the transfer. Administrative expenses can include employee salaries, sales staff commissions, travel costs, and other out-of-pocket costs that are properly attributable to the transfer.
However, the $10,000 flat transfer fee may not be the only cost associated with the transfer. If the transferee was already in Burros Fries's lead database when the franchisee and transferee first made contact, Burros Fries may also require the franchisee to pay a referral fee, in addition to the $10,000 fee. The amount of this referral fee will be customary for the transaction. The franchisee may also be responsible for broker fees that Burros Fries is obligated to pay to third parties, excluding fees paid to Burros Fries's own employees.