To what extent are transfer fees collectable for a Cilantro Taco Grill franchise transfer in Washington?

According to the 2024 Cilantro Taco Grill Franchise Disclosure Document, transfer fees are collectable in Washington to the extent that they reflect the franchisor's reasonable estimated or actual costs in executing the transfer. This means that Cilantro Taco Grill can only charge a transfer fee that covers the expenses they incur while processing the transfer of the franchise to a new owner.

For a prospective franchisee in Washington, this addendum provides some protection against excessive or arbitrary transfer fees. It ensures that the fees charged by Cilantro Taco Grill are tied to actual costs, preventing the franchisor from profiting unduly from franchise transfers in Washington.

However, the FDD does not specify how Cilantro Taco Grill calculates these costs or what documentation they provide to justify the transfer fee amount. A potential franchisee should request a detailed breakdown of the costs associated with the transfer to ensure the fees are indeed reasonable and justifiable under Washington law.