Is the Ella Cafe transfer fee refundable?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
Developer has provided Franchisor the following at least 120 days prior to the proposed closing date of the proposed transfer: (a) written request for Franchisor's consent to the transfer; (b) payment of the non-refundable transfer fee in the amount set forth in the Key Terms, plus reimbursement of Franchisor's reasonable attorneys' fees; and (c) a copy of the proposed asset purchase/transfer agreements, including sale terms.
Source: Item 23 — RECEIPTS (FDD pages 50–181)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, the transfer fee is non-refundable. Specifically, if a developer seeks to transfer their interest in the Development Agreement, they must provide Ella Cafe with a written request for consent to the transfer, payment of the non-refundable transfer fee, and a copy of the proposed asset purchase/transfer agreements at least 120 days before the proposed closing date.
This means that a prospective Ella Cafe franchisee who later decides to sell their franchise should be aware that the transfer fee paid to Ella Cafe to initiate the transfer process will not be returned, regardless of whether the transfer is ultimately completed. This fee covers Ella Cafe's administrative and legal costs associated with reviewing the proposed transfer and assessing the transferee.
It is important for potential franchisees to factor this non-refundable fee into their financial planning and to carefully consider the implications before deciding to sell their Ella Cafe franchise. They should also be prepared to cover Ella Cafe's reasonable attorney's fees, even if the transfer does not proceed.