In Washington, are there any restrictions on transfer fees that Card My Yard can collect?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
- (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)
Based on the 2025 Card My Yard Franchise Disclosure Document, there are no specific references to restrictions on transfer fees that Card My Yard can collect in the state of Washington. However, the document does outline the general conditions and fees associated with transferring a franchise.
Specifically, if a franchisee wishes to transfer their Card My Yard business, they must apply for consent from Card My Yard. As part of this process, the franchisee must pay a transfer fee. This fee is the greater of $3,000 or 5% of the sale/transfer price. The transferor also remains liable for all obligations to Card My Yard incurred before the transfer date and must maintain a one-year tail on their insurance policies.
There is an exception to the standard transfer fee. If the transfer is merely for the convenience of ownership (e.g., to a corporation wholly owned by the franchisee), the transfer fee is limited to Card My Yard's reasonable out-of-pocket costs and expenses, including legal and accounting fees. This exception requires the franchisee to maintain complete ownership of the new entity.
Prospective franchisees in Washington should be aware of these transfer conditions and fees. It is important to note that the FDD does not explicitly address any state-specific regulations regarding transfer fees. Therefore, it would be prudent for potential franchisees to consult with legal counsel to ensure compliance with all applicable Washington state laws regarding franchise transfers.