To whom is the Devon Creek transfer fee payable?
Devon_Creek Franchise · 2024 FDDAnswer from 2024 FDD Document
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| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| System-wide Convention | The then-current fee, $600 maximum per person to attend the System-wide Convention | Before the start of the event | To help offset our out-of-pocket expenses for meeting space, meals, audio visual rental, workbooks, speakers, etc. Does not include travel, lodging, or all meals. Location varies, these fees are payable to and imposed and collected by third parties. The System-wide Convention Fee shall be due to Franchisor whether or not you attend the |
| Transfer Fee | For transfers to: (i) an entity or individual that is new to the System, 75% of the then current Initial Franchise Fee; (ii) an entity or individual that is already an existing owner in the System, 50% of the then current Initial Franchise Fee; and (iii) an entity owned and controlled by the franchisee for convenience purposes without changing the majority ownership in the franchisee entity, $1,500. | Before we approve the transfer | Payable |
Source: Item 6 — OTHER FEES (FDD pages 8–16)
What This Means (2024 FDD)
According to Devon Creek's 2024 Franchise Disclosure Document, the transfer fee is payable to Devon Creek. The amount of the transfer fee varies depending on the nature of the transfer. If the transfer is to an entity or individual new to the Devon Creek system, the fee is 75% of the then-current initial franchise fee. For transfers to an existing owner within the Devon Creek system, the fee is 50% of the then-current initial franchise fee. If the transfer is to an entity owned and controlled by the franchisee for convenience without changing majority ownership, the fee is $1,500.
This fee is due before Devon Creek approves the transfer. This means a prospective franchisee looking to transfer their Devon Creek franchise needs to budget accordingly and understand the specific transfer fee applicable to their situation. It is important to note that the initial franchise fee can change, so the transfer fee amount could vary over time.
Franchise agreements commonly include transfer fees to compensate the franchisor for their time and expenses in reviewing and approving the transfer. These fees help Devon Creek ensure that any new franchisee meets their standards and is capable of operating the franchise successfully. The tiered fee structure (75% for new owners, 50% for existing, and $1,500 for internal transfers) is also a fairly common practice in franchising, reflecting the varying levels of due diligence and training required in each scenario.