What does the Burros Fries flat transfer fee cover?
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).
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to the 2024 Burros Fries Franchise Disclosure Document, a franchisee who transfers part or all of their franchise business must pay a $10,000 flat transfer fee to Burros Fries, assuming Burros Fries provides written consent for the transfer. This fee applies regardless of whether Burros Fries' actual costs to process the transfer are higher or lower than $10,000.
The flat transfer fee covers several expenses Burros Fries incurs during the transfer process. These include reasonable attorney's fees, the cost of investigating the proposed transferee, and Burros Fries' administrative expenses. Administrative expenses include employee salaries, sales staff commissions, travel costs, and other out-of-pocket costs directly related to the transfer.
In addition to the $10,000 flat transfer fee, Burros Fries may require the franchisee to pay a referral fee if the transferee was already in Burros Fries' lead database at the time of the initial contact between the franchisee and the transferee. The referral fee amount will be customary for the transaction. The franchisee may also have to cover any broker fees that Burros Fries is responsible for paying to third parties, excluding fees paid to Burros Fries' own employees.