What is the minimum amount for the Closet Storage Concepts franchise transfer fee?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty | 5% of Gross | Payable on each | (See Note 1) |
| Revenues | Monday via ACH for | ||
| subject to a | the week ending the | ||
| minimum of | immediately prior | ||
| $125 per week | Saturday. | ||
| (NAP) National Advertising Program | Currently $75 | Payable weekly on | (See Note 2) |
| Contribution | per week- | Monday via ACH for | |
| per | |||
| store. Can be | the previous week | ||
| increased but | |||
| any increased | |||
| amount will not | |||
| exceed 1% of | |||
| weekly Gross | |||
| Revenues | |||
| provided that | |||
| no increases | |||
| will occur in | |||
| the first | |||
| year | |||
| of | |||
| the agreement. | |||
| Transfer of Franchise | 50% of the | Before transfer. | Either you or the |
| then current | transferee pays | ||
| Initial | this fee to us. | ||
| Franchise Fee, | |||
| subject to a |
Source: Item 6 — OTHER FEES (FDD pages 13–18)
What This Means (2025 FDD)
According to Closet Storage Concepts's 2025 Franchise Disclosure Document, a franchisee who transfers their franchise must pay a transfer fee. This fee is equal to 50% of the then-current Initial Franchise Fee, but is subject to a minimum of $24,750. This means that even if 50% of the current Initial Franchise Fee is less than $24,750, the franchisee will still have to pay the minimum amount.
The transfer fee is due before the transfer of the franchise is completed. The FDD indicates that either the franchisee (the seller) or the transferee (the buyer) is responsible for paying this fee to Closet Storage Concepts. It is important for both parties to clarify who will bear this cost during negotiations.
Franchise transfer fees are common in the franchise industry. They compensate the franchisor for their time and expenses in approving the transfer, updating records, and ensuring the new franchisee is properly trained and qualified. The fee also serves as an incentive for the original franchisee to fulfill their obligations under the franchise agreement before exiting the system. Prospective franchisees should consider this potential cost when evaluating the long-term investment in a Closet Storage Concepts franchise.