Under Washington law, what is the limitation on transfer fees that Cinnaholic can collect?

According to Cinnaholic's 2025 Franchise Disclosure Document, Washington state law places a restriction on the transfer fees that Cinnaholic can collect from franchisees. Specifically, transfer fees are only permitted to the extent that they accurately reflect Cinnaholic's reasonable estimated or actual costs incurred during the transfer process. This means Cinnaholic cannot impose arbitrary or inflated transfer fees.

For a prospective Cinnaholic franchisee in Washington, this addendum provides a degree of protection against excessive transfer fees. If a franchisee decides to sell their Cinnaholic franchise, the fees charged by Cinnaholic must be justifiable based on the actual expenses Cinnaholic incurs. This could include costs related to reviewing the potential buyer, legal documentation, and training the new franchisee.

This provision aims to prevent franchisors from profiting unduly from franchise transfers. Franchisees should ensure they receive a detailed breakdown of the costs associated with the transfer to verify that the fees are indeed reasonable and in compliance with Washington law. This protection is particularly important as transfer fees can sometimes be a point of contention in franchise agreements.