What is the transfer fee required by Ella Cafe for a franchise transfer?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
e's approval or prior notice to Franchisee, provided that the buyer, assignee or transferee agrees in writing to assume all of Franchisor's obligations under this Agreement. Franchisor and its Indemnitees will not be liable for obligations of the transferee arising after the date of transfer.
- 15.2 By Franchisee. Franchisee acknowledges that the rights and duties set forth in this Agreement are personal to Franchisee and that Franchisor entered into this Agreement in reliance on Franchisee's business skill, financial capacity, personal character, experience, and business ability. Accordingly, Franchisee shall not conduct or undergo a Transfer without providing Franchisor at least 60 days prior notice of the proposed Transfer, and without obtaining Franchisor' consent. In granting any such consent, Franchisor may impose conditions, including, without limitation, the following:
- (i) Franchisor receives a transfer fee of $10,000 ("Transfer Fee") plus any broker fees and other out-of-pocket costs incurred by Franchisor, including attorneys' fees
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, a franchisee who wishes to transfer their franchise must first provide the franchisor with 60 days' notice and obtain their consent. Ella Cafe may impose certain conditions when granting consent for a transfer.
One of these conditions is the payment of a transfer fee. The transfer fee is $10,000, in addition to any broker fees and out-of-pocket costs incurred by Ella Cafe, including attorney's fees.
Other conditions that Ella Cafe may impose include ensuring the proposed assignee completes the franchise application process, meets the standards for new franchisees, is not a competitor, executes the current franchise agreement, and provides a guaranty in accordance with Section 2.6 of the agreement.