What is the standard for determining if City Wide transfer fees are collectable in Washington?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
lty Rebate, based upon the criteria set forth in the Royalty Rebate Program, Franchisee and the transferee shall split the Royalty Rebate on a pro rata basis based upon the number of months each owned the Franchise Business. For purposes of calculating the Gross Sales, the aggregate of the Gross Sales of Franchisee before the Transfer will be added to the Gross Sales generated by the transferee after the Transfer. If eligible, the Royalty Rebate will be paid as stated herein and in the Operating Manual.
- 13.5 Transfer Fee. In the event CITY WIDE approves a Transfer, Franchisee shall pay to CITY WIDE a transfer fee ("Transfer Fee") which is equal to Twenty Five Thou
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
Based on the 2025 City Wide Franchise Disclosure Document, the FDD does not specify any state-specific standards or conditions for the collection of transfer fees, including those in Washington. The FDD outlines the general conditions under which a transfer fee is payable.
According to the FDD, a franchisee must pay City Wide a transfer fee of $25,000, along with any applicable third-party broker fees, if City Wide approves a transfer of the franchise. This fee is in addition to any initial franchise fee that may be due under the then-current franchise agreement. However, these transfer fees and conditions do not apply if the transfer is among current owners, their spouses, domestic partners, or children, provided that such a transfer does not result in a loss of control of the franchise.
Since the FDD does not provide specific information regarding the enforceability or collectability of transfer fees in Washington, a prospective franchisee should consult with a legal professional in Washington to understand how state laws might affect the transfer fee requirements outlined in the City Wide franchise agreement. Additionally, it would be prudent to directly ask City Wide about any specific requirements or considerations related to franchise transfers in Washington to ensure full compliance with all applicable regulations.