What is the transfer fee for a Cinch I.T. Development Agreement for an unopened franchise?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
| TYPE OF FEE1 | AMOUNT | DUE DATE | REMARKS |
|---|---|---|---|
| Transfer Fee – Development Agreement | $5,000 for each unopened Franchise; $10,000 for each open and operating Franchised Business. | Time of transfer | Payable if Multi-Unit Developer sells its franchise. No fee charged if you transfer franchise to a corporation or other entity you control. |
Source: Item 6 — OTHER FEES (FDD pages 14–20)
What This Means (2024 FDD)
According to Cinch I.T.'s 2024 Franchise Disclosure Document, a Multi-Unit Developer who sells their franchise will be charged a transfer fee. The transfer fee for each unopened Cinch I.T. franchise is $5,000. This fee is due at the time of the transfer.
It is important to note that this transfer fee applies specifically to Multi-Unit Developers. If a franchisee transfers their franchise to a corporation or other entity they control, no transfer fee is charged. This provides an exception for franchisees restructuring their business ownership without changing operational control.
Prospective Multi-Unit Developers should consider this transfer fee as a potential cost if they plan to sell their development agreement before opening all of their franchises. This fee can impact the financial return on investment, especially if multiple unopened franchises are involved in the transfer. Understanding the conditions under which this fee is applied is crucial for financial planning and decision-making.