What is the Chop5 Salad Kitchen transfer fee if the ADA is used?
Chop5_Salad_Kitchen Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee 1 | AMOUNT 2, 3 | DUE DATE | REMARKS |
|---|---|---|---|
| Transfer Fee | [Franchise Agreement] Greater of $4,000 or 10% of then-current standard | ||
| initial franchise fee [ADA] $15,000 | Before Transfer | You do not pay us a transfer fee for a Permitted Transfer or Minority Interest Transfer. All other Transfers require payment of the transfer fee. If you sign an ADA, a separate transfer fee is imposed under the ADA and each Franchise Agreement that is assigned. If our broker finds the buyer, you must also reimburse us for all commissions we pay the broker. |
Source: Item 6 — OTHER FEES (FDD pages 12–17)
What This Means (2024 FDD)
According to Chop5 Salad Kitchen's 2024 Franchise Disclosure Document, the transfer fee for an Area Development Agreement (ADA) is $15,000. This fee is due before the transfer takes place.
However, this fee is not required for Permitted Transfers or Minority Interest Transfers. If a franchisee signs an ADA, a separate transfer fee is imposed under both the ADA and each Franchise Agreement that is assigned.
If Chop5 Salad Kitchen's broker finds the buyer, the franchisee must also reimburse Chop5 Salad Kitchen for all commissions paid to the broker. This is in addition to the transfer fee. It is important for prospective franchisees to understand all the conditions under which a transfer fee is required to avoid unexpected costs.