When is the Dryer Vent Squad transfer fee due?
Dryer_Vent_Squad Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of (Note 1) | Amount | Due Date | Remarks |
|---|---|---|---|
| including audit, legal, travel and reasonable accommodations. | |||
| Quality Assurance Audit | Actual costs incurred by us | As invoiced | Payable if we engage a third party to perform periodic quality assurance audits, including mystery shopper programs. |
| Collections | Actual fees, costs, and expenses | On demand | For costs and expenses incurred by us in collecting fees due to us, and/or to enforce the terms of the franchise agreement or a termination of the franchise agreement. Includes costs and expenses of re-inspections required by quality assurance audit. |
| Reimbursement | Costs and expenses incurred by us, plus 10% of the costs and expenses incurred | 14 days of invoice | You shall reimburse us for costs and expenses incurred if we pay any amount that you owe or are required to pay to a third party, plus an additional fee of 10% of the costs and expenses incurred by us. |
| Transfer | Either: (a) $5,000 if the transferee is an existing franchisee; or (b) $12,500 for all other transfers | On demand | Payable if we approve your transfer request and upon signing our then current franchise agreement. |
| Renewal | 5% of our then current initial franchise fee | On signing renewal franchise agreement | Payable if we approve your renewal request and upon signing our then current franchise agreement. |
Source: Item 6 — OTHER FEES (FDD pages 16–21)
What This Means (2024 FDD)
According to Dryer Vent Squad's 2024 Franchise Disclosure Document, the transfer fee is due 'on demand.' This fee is payable if Dryer Vent Squad approves the transfer request and upon signing their then-current franchise agreement. The amount of the transfer fee depends on who the franchise is being transferred to. If the transferee is an existing franchisee, the transfer fee is $5,000. For all other transfers, the fee is $12,500.
In the context of franchising, a transfer fee is a fairly standard charge when a franchisee sells their business to a new owner. The fee typically covers the franchisor's administrative costs for reviewing and approving the transfer, as well as updating the franchise agreement. The fact that Dryer Vent Squad charges a lower fee for transfers to existing franchisees may incentivize current franchisees to expand their operations by acquiring existing locations.
The phrase 'on demand' means that Dryer Vent Squad can request payment of the transfer fee at any time after the conditions for payment have been met (approval of the transfer and signing of the new franchise agreement). This gives Dryer Vent Squad flexibility in managing the transfer process and ensuring timely payment of the fee. A prospective franchisee should clarify with Dryer Vent Squad the exact timing of when the transfer fee will be demanded to ensure they are prepared to make the payment.