What costs can Cr3 American Exteriors include in transfer fees?
Cr3_American_Exteriors Franchise · 2025 FDDAnswer from 2025 FDD Document
You will pay to us a fee of 20% of the then current Initial Franchise Fee if you wish to transfer ownership of the rights under this Franchise Agreement, or a majority of the rights under this Franchise Agreement or in an entity holding this Agreement (the "Transfer Fee"). We do not charge a Transfer Fee for the transfer of a minority interest in the Franchised Business or if the Parties of this Agreement transfer this Agreement into an entity with the same Parties who hold the same percentages of shares.
Source: Item 23 — RECEIPTS (FDD pages 53–150)
What This Means (2025 FDD)
According to Cr3 American Exteriors's 2025 Franchise Disclosure Document, if a franchisee wishes to transfer ownership of their rights under the Franchise Agreement, they must pay a Transfer Fee. This fee is equal to 20% of the then-current Initial Franchise Fee.
For a prospective Cr3 American Exteriors franchisee, this means that if they decide to sell their franchise, they will need to factor in this Transfer Fee. The fee is calculated based on the initial franchise fee at the time of the transfer, not the initial fee they originally paid. Therefore, if the initial franchise fee has increased since they purchased their franchise, the transfer fee will be higher.
However, the FDD specifies that a Transfer Fee is not charged for the transfer of a minority interest in the Franchised Business. Also, if the parties of the agreement transfer the agreement into an entity with the same parties who hold the same percentages of shares, a transfer fee is not charged. This provides some flexibility for franchisees in structuring ownership changes without incurring the Transfer Fee.