Besides the transfer fee, what other costs may Desi District charge during a transfer?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
ICLE 15. TRANSFERS**
- 15.1 By Desi District Franchise Group. Desi District Franchise Group may transfer or assign this Agreement, or any of its rights or obligations under this Agreement, to any person or entity, and Desi District Franchise Group may undergo a change in ownership and/or control, without the consent of Franchisee.
- 15.2 By Franchisee. Franchisee acknowledges that the rights and duties set forth in this Agreement are personal to Franchisee and that Desi District Franchise Group entered into this Agreement in reliance on Franchisee's business skill, financial capacity, personal character, experience, and business ability. Accordingly, Franchisee shall not conduct or undergo a Transfer without providing Desi District Franchise Group at least 60 days prior notice of the proposed Transfer, and without obtaining Desi
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, a franchisee looking to transfer their franchise may incur costs beyond the $10,000 transfer fee. Specifically, Desi District may charge for any broker fees and other out-of-pocket costs they incur during the transfer process. This means the total cost of the transfer could exceed the stated transfer fee, depending on the specifics of the transaction and the expenses Desi District incurs.
This provision is fairly standard in franchising, as franchisors want to be reimbursed for any expenses they incur while reviewing and approving a transfer. These 'out-of-pocket costs' could include legal fees for reviewing transfer documents, travel expenses for meeting with the potential new franchisee, and costs associated with training the new franchisee. The FDD does not provide an estimate for these potential additional costs, so it is important for a prospective franchisee to discuss these potential costs with Desi District.
It is important for a prospective franchisee to understand all potential costs associated with transferring a Desi District franchise. Franchisees should inquire with Desi District about what specific 'out-of-pocket costs' they might expect to incur during a transfer. Additionally, franchisees should carefully review the franchise agreement to fully understand the conditions and requirements for transferring their franchise.