What is the Chop5 Salad Kitchen transfer fee if the Franchise Agreement 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 the Franchise Agreement is the greater of $4,000 or 10% of the then-current standard initial franchise fee. This fee is due before the transfer takes place.
However, a franchisee does not pay a transfer fee for a Permitted Transfer or Minority Interest Transfer. If a franchisee signs an Area Development Agreement (ADA), a separate transfer fee is imposed under the ADA and each Franchise Agreement that is assigned.
Additionally, if Chop5 Salad Kitchen's broker finds the buyer, the franchisee must also reimburse Chop5 Salad Kitchen for all commissions they pay the broker. This could add a significant expense to the transfer process, depending on the broker's commission structure.