Under what conditions are City Wide transfer fees 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)
According to City Wide's 2025 Franchise Disclosure Document, a franchisee must pay a transfer fee of $25,000, plus 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 current franchise agreement. However, if the transfer is to or among current owners, or to their immediate family members, and does not result in a loss of control of the franchise, these transfer fees do not apply.
To initiate a transfer, the franchisee must first notify City Wide in writing, providing full details of the proposed transfer, including the transferee's information and business experience. The proposed transferee must then apply for a franchise and meet all of City Wide's current standards for franchisees. City Wide has the option to purchase the franchise interest themselves by matching the financial terms of the proposed transfer. If City Wide declines to exercise this option, they will then assess the proposed transferee.
Before the transfer can be finalized, the franchisee must pay all outstanding amounts owed to City Wide and resolve any breaches of the franchise agreement. Both the franchisee and the transferee must jointly request an inspection of the location and the franchisee's books, which may result in required repairs or additional fees. The transferee must also execute the current franchise agreement, pay all required fees, including initial fees, and provide any additional guarantees that City Wide may require. These conditions apply generally to all transfers, and the FDD does not specify any conditions that are specific to Washington.