Can the royalty rate be higher in the new franchise agreement for a Canine Dimensions transferee?
Canine_Dimensions Franchise · 2025 FDDAnswer from 2025 FDD Document
ranchise fee and that the protected territory will be the same as the Protected Territory provided for in this Agreement.
- (g) Within the time specified by Franchisor, the transferee, at its expense, must upgrade the Franchised Business to conform to Franchisor's then-current standards and specifications.
- (h) Franchisee shall remain liable for all of the obligations to Franchisor in connection with the Franchised Business prior to the effective date of the Transfer and shall execute any and all instruments reasonably requested by Franchisor to evidence such liability.
- (i) At the transferee's expense, the transferee and the transferee's Associates shall complete any training programs then in effect for franchisees upon such terms and conditions as Franchisor may reasonably require.
- (j) Except in the case of a Transfer to a Business Entity formed for the convenience of ownership, as set forth in Section 13.4 below, Franchisee or its transferee must pay to Franchisor
a transfer fee in the amount of Ten Thousand Dollars ($10,000) for each Protected Territory being Transferred by Franchisee under this Agreement and if such transfer requires the new owner undergo training, we will require an additional non-refundable Twelve Tho
Source: Item 22 — CONTRACTS (FDD page 36)
What This Means (2025 FDD)
Based on the 2025 Canine Dimensions Franchise Disclosure Document, the document does not explicitly state whether the royalty rate can be higher in a new franchise agreement for a transferee. However, the document does outline several conditions and fees associated with the transfer of a franchise. Specifically, the transferee must upgrade the franchised business to meet the franchisor's current standards, complete any required training programs, and, except in specific cases, pay a transfer fee of $10,000 for each protected territory transferred. An additional $12,500 training fee may be required if the new owner needs training.
While the FDD details transfer-related obligations and costs, it remains silent on the possibility of a modified royalty rate for the transferee's franchise agreement. This absence of information suggests that the royalty rate might remain consistent with the original agreement, but it is crucial to confirm this with Canine Dimensions directly.
A prospective franchisee should directly ask Canine Dimensions whether the royalty rate is subject to change upon transfer to fully understand the financial implications. It would also be prudent to clarify whether any other fees or conditions not explicitly mentioned in the FDD might apply during a transfer scenario.