What is the initial transfer fee for a Dq Treat license, and when is it due?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
** The transferee must meet Company's then current requirements for transferees, including those relating to financial position and management and operational experience.
- (E) Transfer Fee.
- (1) Amount. Licensee must pay Company a transfer fee of $5,500, which is due when Licensee submits the application for consent of the transfer. The transfer fee increases by $500 on January 1, 2025, and on each 5-year anniversary of that date.
- (2) Refund. If Company exercises its right of first refusal or does not consent to a proposed transfer, Company will return the transfer fee to Licensee, minus any actual expenditures or disbursements made by Company in direct connection with evaluating or processing the proposed transfer, together with an itemized statement of these costs. The transfer fee is not refundable in whole or in part except as expressly stated in this agreement.
- (F) Payment of Amounts Owed. All amounts owed by Licensee to Company or any of Company's affiliates, Licensee's suppliers, or any landlord for the Restaurant premises and Authorized Location, or upon which Company or any of Company's affiliates have any contingent liability, must be paid in full.
- (G) Compliance with Agreement. Licensee must be in full compliance with the terms of this agreement, including providing Company with all reports required in sections 9.9 and 9.10 through the effective date of the transfer.
- (H) Guarantee. All Owners of transferee must sign Company's then current form of undertaking and guarantee. In addition, if Company allows Licensee or an Owner to retain a security or other financial interest in this agreement or the Restaurant after the transfer, then Licensee and the Owner must guarantee the performance of this agreement until the security or other financial interest terminates.
- (I) General Release. Licensee, each Owner, and each guarantor must sign a general release of all claims arising out of or relating to this agreement, Licensee's Restaurant, or the parties' business relationship, in the form designated by Company, releasing Company and its affiliates.
- (J) Training. The transferee must, at Licensee's or transferee's expense, comply with Company's th
Source: Item 17 — The following paragraph is added to the end of Item 17 of the Disclosure Document: (FDD pages 70–378)
What This Means (2025 FDD)
Based on the 2025 Dq Treat FDD, the transfer fee for a license increases by $500 on January 1, 2025, and every five years thereafter. The FDD also specifies conditions under which the transfer fee may be refunded. If Dq Treat exercises its right of first refusal or does not consent to the proposed transfer, the company will return the transfer fee to the licensee. However, Dq Treat will deduct any actual expenditures or disbursements made while evaluating or processing the proposed transfer, along with an itemized statement of these costs. The transfer fee is otherwise non-refundable.
To proceed with a transfer, the licensee must fulfill several obligations. All amounts owed to Dq Treat, its affiliates, the licensee's suppliers, or any landlord for the restaurant premises must be paid in full. The licensee must also be in full compliance with the terms of the existing agreement, including providing all required reports through the effective date of the transfer. All owners of the transferee must sign Dq Treat's current form of undertaking and guarantee. Additionally, the licensee, each owner, and each guarantor must sign a general release of all claims related to the agreement, the restaurant, or the business relationship, in a form designated by Dq Treat, releasing Dq Treat and its affiliates from any liability.
The transferee is required to comply with Dq Treat's current training requirements for DQ® Treat restaurants at their own expense. Dq Treat may also require the licensee to prepare and furnish financial reports and other data relating to the restaurant and its operations, as deemed necessary for the transferee or Dq Treat to evaluate the restaurant and the proposed transfer. These conditions ensure that the transfer process is thorough and that the new franchisee is well-prepared to operate the Dq Treat business.
Prospective franchisees should note the increasing transfer fee and the various conditions that must be met for a transfer to be approved. Understanding these requirements is crucial for planning and financial forecasting when considering a Dq Treat franchise.