Under what condition are transfer fees collectable for a Chesters franchise in Washington?

According to the 2025 Chesters Franchise Disclosure Document, transfer fees in Washington state are collectable only to the extent that they reflect Chesters's reasonable estimated or actual costs in facilitating the transfer. This means that Chesters cannot charge an arbitrary or inflated transfer fee. The fee must be directly tied to the expenses Chesters incurs during the transfer process.

For a prospective franchisee, this provides some protection against excessive transfer fees. If a franchisee decides to sell their Chesters franchise, the transfer fee they are charged must be justifiable based on the franchisor's actual costs. This contrasts with some franchise systems where transfer fees can be a fixed amount, potentially generating a profit for the franchisor.

However, the FDD does not specify how Chesters calculates these costs or what documentation they provide to justify the fee. A prospective franchisee should ask Chesters for a detailed breakdown of the costs associated with a franchise transfer to ensure transparency and fairness. Understanding the specific costs that Chesters includes in the transfer fee will help a franchisee assess whether the fee is indeed reasonable.