To what extent are transfer fees collectable from a Churchs Chicken franchisee in Washington?

According to the 2025 Churchs Chicken Franchise Disclosure Document, transfer fees are collectable from a franchisee in Washington only to the extent that the fees reflect Churchs Chicken's reasonable estimated or actual costs in completing the transfer. This means Churchs Chicken cannot charge an arbitrary or inflated transfer fee; the fee must be tied to the actual expenses the company incurs during the transfer process. This provision is part of a Washington-specific addendum to the franchise agreement, indicating that Washington state law places specific limits on transfer fees.

For a prospective Churchs Chicken franchisee in Washington, this is a beneficial protection. It prevents the franchisor from imposing excessive fees that could hinder the sale of the franchise. It ensures that the franchisee is only responsible for covering the legitimate costs associated with the transfer, such as administrative work, legal reviews, and training of the new franchisee. This can make the franchise more attractive to potential buyers, as it reduces the financial burden associated with the transfer.

It is important for a potential Churchs Chicken franchisee to understand what constitutes "reasonable estimated or actual costs." This could include expenses like legal and accounting fees, the cost of training the new franchisee, and administrative costs related to processing the transfer. Franchisees should request a detailed breakdown of these costs from Churchs Chicken before agreeing to a transfer to ensure transparency and avoid disputes. Keeping detailed records of all transfer-related expenses is advisable for both the franchisor and franchisee to ensure compliance with Washington law.