Is the City Publications franchisee required to pay the transfer fee before the transfer is approved?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall have provided Franchisor with a complete copy of all contracts and agreements and related documentation between Franchisee and the transferee relating to the sale or transfer of the Franchise.
Franchisee shall have paid to Franchisor a transfer fee in the standard amount then being charged by Franchisor.
The new franchisee shall be responsible for attending and paying for initial training and for paying all start-up expenses.
This transfer fee is waived for a qualified transfer to immediate family members.
If the franchisee is an entity, this transfer fee is waived for qualified transfer to any shareholder, member, or partner who has signed a personal guarantee.
Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
According to City Publications' 2025 Franchise Disclosure Document, a franchisee is required to pay a transfer fee to City Publications when transferring their franchise. The FDD states that the franchisee must pay City Publications a transfer fee in the standard amount then being charged by City Publications.
This fee is generally required to cover City Publications' administrative costs associated with the transfer process, such as reviewing the transferee's qualifications and updating franchise records. The disclosure clarifies that this transfer fee is waived under specific conditions: for qualified transfers to immediate family members, or if the franchisee is an entity, for qualified transfers to any shareholder, member, or partner who has signed a personal guarantee.
In addition to paying the transfer fee (unless waived), the franchisee must also provide City Publications with a complete copy of all contracts, agreements, and related documentation between the franchisee and the transferee relating to the sale or transfer of the franchise. The transferee must also satisfy City Publications that it meets City Publications' management, business, and financial standards and otherwise possesses the character and capabilities, including business reputation and credit rating, as City Publications may require, demonstrating ability to conduct the Franchised Business.
Furthermore, the transferee must execute the then-current Franchise Agreement for new franchisees, which may differ substantially from the original agreement, including variations in Royalty Fee payments, territorial protections, and other material provisions. The transferee must also execute a general release of any and all claims against City Publications. These stipulations ensure that City Publications maintains control over who enters its franchise system and that the new franchisee is fully committed to the current terms and conditions of the franchise agreement.