When is the transfer fee due for a Dq Treat franchise agreement?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount(1) P | Due Date(5) P | Remarks |
|---|---|---|---|
| Lease-Required Sales Promotion Fees | Will vary under circumstances | When due | In addition to the sales promotion program fees above, you must pay all sales promotion fees and comply with all sales promotion requirements required by your lease or sublease. |
| Transfer Fee (for franchise agreement) | $6,000 | When you submit transfer application | Effective January 1, 2030, and each 5 years thereafter, the transfer fee increases by $500. If ADQ refuses to consent to your proposed transfer or exercises its right of first refusal, ADQ will return the transfer fee, less any actual expenditures or disbursements that ADQ makes in direct connection with processing the proposed transfer. |
| Renewal Fee (for franchise agreement) | $1,000 times number of years under renewal term (but not to exceed $10,000) | At time of renewal | Any partial year of the renewal term will count as a full year for purposes of calculating the renewal fee. For example, if at the end of the initial term of the franchise agreement, you enter into a renewal franchise agreement with a term of 7½ years, you will be required to pay a renewal fee of $8,000. |
| Audit and Recordkeeping Costs | Your contractual percentage continuing license fees and percentage sales promotion program fees times the amount of understated Gross Sales, plus any other amounts owed to us | After audit revealing understatement of Gross Sales by 3% or more | If an initial evaluation or audit reveals an understatement of Gross Sales by 3% or more, you must pay all costs for the audit, including salaries, outside accountant and attorneys’ fees, copying costs, postage, travel, meals, and lodging (“audit costs”), plus audit costs for any additional audits within 2 years after the initial evaluation or audit. |
Source: Item 6 — Other Fees (FDD pages 20–24)
What This Means (2025 FDD)
According to Dq Treat's 2025 Franchise Disclosure Document, the transfer fee for a franchise agreement is due when you submit the transfer application. The initial transfer fee is $6,000.
It's important to note that the transfer fee is subject to change. Specifically, the FDD states that effective January 1, 2030, and every 5 years thereafter, the transfer fee will increase by $500. This means that franchisees should anticipate potential increases in the transfer fee over time.
The FDD also specifies that if ADQ (presumably an affiliate of Dq Treat) refuses to consent to the proposed transfer or exercises its right of first refusal, Dq Treat will return the transfer fee to the franchisee. However, Dq Treat may deduct any actual expenditures or disbursements that it incurs in directly processing the proposed transfer. This implies that even if a transfer is not approved, the franchisee may not receive a full refund of the transfer fee.