What transfer fee does Chocolate Fish Coffee charge upon transfer of the franchise?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
rchase option to another party.
ARTICLE 15. TRANSFERS
- 15.1 By Chocolate Fish Franchising. Chocolate Fish Franchising may transfer or assign this Agreement, or any of its rights or obligations under this Agreement, to any person or entity, and Chocolate Fish Franchising may undergo a change in ownership and/or control, without the consent of Franchisee.
- 15.2 By Franchisee. Franchisee acknowledges that the rights and duties set forth in this Agreement are personal to Franchisee and that Chocolate Fish Franchising entered into this Agreement in reliance on Franchisee's business skill, financial capacity, personal character, experience, and business ability. Accordingly, Franchisee shall not conduct or undergo a Transfer without providing Chocolate Fish Franchising at least 60 days prior notice of the proposed Transfer, and without obtaining Chocolate Fish Franchising's consent. In granting any such consent, Chocolate Fish Franchising may impose conditions, including, without limitation, the following:
- (i) Chocolate Fish Franchising receives a transfer fee equal to $10,000 plus any broker fees and other out-of-pocket costs incurred by Chocolate Fish Franchising;
- (ii) the proposed assignee and its owners have completed Chocolate Fish Franchising's franchise application processes, meet Chocolate Fish Franchising's then-applicable standards for new franchisees, and have been approved by Chocolate Fish Franchising as franchis
Source: Item 23 — RECEIPTS (FDD pages 41–119)
What This Means (2024 FDD)
According to Chocolate Fish Coffee's 2024 Franchise Disclosure Document, if a franchisee wishes to transfer their franchise, Chocolate Fish Coffee may impose certain conditions, including a transfer fee. Specifically, Chocolate Fish Coffee requires a transfer fee equal to $10,000, in addition to any broker fees and other out-of-pocket costs incurred by Chocolate Fish Coffee.
This means that if a Chocolate Fish Coffee franchisee decides to sell their business to a third party, they should anticipate paying this fee to the franchisor. It is important to note that this transfer fee is in addition to any other costs associated with the transfer, such as legal fees or broker fees that the franchisee might incur.
Furthermore, the potential buyer must also meet Chocolate Fish Coffee's standards for new franchisees and be approved by them. The proposed assignee also needs to execute Chocolate Fish Coffee's current form of franchise agreement, which may contain different provisions than the original agreement. The franchisee must also ensure that all monetary obligations to Chocolate Fish Coffee and its affiliates are paid and that they are not in default of any agreements.