Can Cinnaholic collect transfer fees that exceed their reasonable estimated or actual costs in Washington?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
- **6.
Transfer Fees**.
Transfer fees are collectable only to the extent that they reflect the franchisor's reasonable estimated or actual costs in effecting a transfer.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 27–35)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, the franchise can only collect transfer fees in Washington to the extent that the fees reflect Cinnaholic's reasonable estimated or actual costs in facilitating the transfer. This is specified in the Washington Addendum included in the FDD.
This provision protects prospective Cinnaholic franchisees in Washington from excessive or arbitrary transfer fees. It ensures that the fees charged are directly related to the costs Cinnaholic incurs during the transfer process. This is more favorable than in states where franchisors can profit from transfer fees.
For a prospective franchisee, this means that if they decide to sell their Cinnaholic franchise, the transfer fees they are charged must be justifiable and transparent. They have the right to question any fees that seem unreasonable or exceed the actual costs incurred by Cinnaholic. This provides a level of financial protection and fairness in the transfer process for Cinnaholic franchisees in Washington.