To what extent are transfer fees collectable by Card My Yard?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
All Transferrees acquiring an existing Card My Yard business from a franchisee must sign our then-current Franchise Agreement within thirty (30) days of approval of the transfer by us, and payment of applicable transfer fee.
If you seek to transfer or resell your business, failure to follow this process will incur the then-current termination fees and result in termination of your franchise;
(8) The transferor shall remain liable for all of its obligations to us under this Agreement incurred prior to the effective date of the transfer, shall obtain a one-year tail on each of its insurance policies to cover any liabilities that may have been incurred prior to the effective date of the transfer, and shall execute any and all instruments reasonably requested by us to evidence such liability;
(9) You must pay us a transfer fee in an amount equal to the greater of: (a) $3,000, or (b) 5% of the applicable sale/transfer price (whether for cash or other consideration);
C. Transfer for Convenience of Ownership. If the proposed transfer is to a corporation or other entity
wholly owned by you and formed solely for the convenience of ownership, our consent may be conditioned upon any of the requirements in Section XV.B., except that Sections XV.B.(3), (4), (5), and (7) shall not apply, and the fee provided for in Section XV.B.(9) shall be limited to our reasonable out-of-pocket costs and expenses (including legal and accounting fees and costs) related to such transfer. In any transfer for the convenience of ownership, you must be the owner of all the voting stock or ownership interests in the new entity, or, if you are more than one individual, each individual shall have the same proportionate ownership interest in the new entity as he or she had in you before the transfer.
Source: Item 23 — RECEIPTS (FDD pages 84–259)
What This Means (2025 FDD)
According to Card My Yard's 2025 Franchise Disclosure Document, a transfer fee is required when a franchisee transfers their business. The transfer fee is the greater of $3,000 or 5% of the sale/transfer price. This fee must be paid when transferring an existing Card My Yard business to a new franchisee. The new franchisee must also sign the then-current Franchise Agreement within 30 days of the transfer's approval.
There is an exception to the standard transfer fee in cases of transfer for the convenience of ownership. If the transfer is to a corporation or other entity wholly owned by the franchisee and formed solely for convenience, the transfer fee is limited to Card My Yard's reasonable out-of-pocket costs and expenses, including legal and accounting fees. To qualify for this exception, the franchisee must own all voting stock or ownership interests in the new entity, maintaining the same proportionate ownership as before the transfer.
Failure to follow the outlined transfer process can lead to termination fees and the termination of the franchise agreement. The transferor remains liable for all obligations to Card My Yard incurred before the transfer's effective date and must maintain a one-year tail on their insurance policies to cover prior liabilities. Card My Yard retains the right to approve or deny a transfer, and the proposed transferee must meet the franchisor's current qualifications and complete any required training programs.