Does the new agreement for a transferred Carbones Pizzeria franchise have the same fees as the original?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in | Summary |
|---|---|---|
| Franchise Agreement | ||
| a. Length of the Franchise term | Section 2 | 10 years from date of signing the Franchise Agreement |
| b. Renewal or extension of the term | Section 2 (See Note 2) | One 10 year term |
| c. Requirements for franchisee to renew or extend | Section 2 | Sign new agreement (which may contain materially different terms and conditions than your original Franchise Agreement), pay renewal fee, update your Restaurant to meet our then-current requirements for new restaurants |
| d. Termination by franchisee | None | Not applicable |
| e. Termination by franchisor without | None | Not applicable |
| cause | ||
| f. Termination by franchisor with cause | Section 15 | We may terminate only if you do one of the things described in Section 15 |
| g. "Cause" defined – curable defaults | Sections 15(e) through 15(f) | You have 30 days to cure nonpayment of fees, sanitation problems, non submission of reports and any other default not listed in Section 15 |
| h. "Cause" defined – non-curable defaults | Sections 15(a) through 15(d) | Non curable defaults include abandonment, trademark misuse and conviction of an offense directly related to the Restaurant business |
| i. Franchisee's obligations on termination/nonrenewal | Section 16 | Obligations include complete de identification and payment of amounts due. (See also "Noncompetition covenants after the franchise is terminated or expires" below.) |
| j. Assignment of contract by franchisor | No restriction on our right to assign | |
| k. "Transfer" by franchisee – defined | Sections 13 and 14 | Includes transfer of Franchise Agreement or assets or ownership change |
| l. Franchisor's approval of transfer by franchisee | Section 13 | We have the right to approve all transfers but will not unreasonably withhold approval so long as all conditions to transfer have been satisfied |
| m. Conditions for franchisor approval of transfer | Section 13(b) | New franchisee qualifies, transfer fee paid, training completed, release signed by you and current agreement signed by new franchisee. (The new agreement may provide for different fees or territory than in your agreement, but we will not require the transferee to pay us a |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 24–26)
What This Means (2025 FDD)
According to Carbones Pizzeria's 2025 Franchise Disclosure Document, the fees in a new franchise agreement after a transfer may differ from the original agreement. Specifically, the franchisor states that the new agreement signed by the new franchisee "may provide for different fees or territory than in your agreement." However, Carbones Pizzeria will not require the new franchisee to pay a new initial franchise fee.
This means that a prospective buyer of an existing Carbones Pizzeria franchise should carefully review the terms of the new franchise agreement offered to them. While they won't have to pay the initial franchise fee again, other fees, such as royalty fees or marketing fees, could be different. The territory granted to the new franchisee could also be different than the original franchisee's territory.
It is important for both the seller and the buyer of a Carbones Pizzeria franchise to understand these potential changes. The seller should be aware that the value of their franchise may be affected by the terms offered to the buyer. The buyer needs to evaluate the new agreement to determine if the franchise opportunity is still financially viable and meets their business goals, considering the modified fees or territory.