What costs can transfer fees for a Corcoran franchise reflect?

According to the 2025 FDD, transfer fees for a Corcoran franchise are collectable only to the extent that they reflect the franchisor's reasonable estimated or actual costs in effecting a transfer. This means that Corcoran can only charge a transfer fee that covers the expenses they incur while processing the transfer of the franchise to a new owner.

This policy protects franchisees from excessive or arbitrary transfer fees. It ensures that the fees are tied to actual costs, such as legal and administrative work, and due diligence related to the new franchisee. The FDD specifies a $5,000 transfer fee, but this clause clarifies that the fee must be justified by actual costs.

This is a fairly standard practice in franchising, as many franchise agreements stipulate that transfer fees must be reasonable and reflect the franchisor's actual costs. Prospective Corcoran franchisees should ensure they understand what specific costs are covered by the transfer fee to avoid any disputes during a potential transfer.