Under what circumstances does Ella Cafe permit a transfer for convenience of ownership without a fee?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Transfer For Convenience | No fee to transfer for convenience of ownership or non controlling interest, except reimbursement of our attorneys' fees | When transfer is requested | Transfer for convenience of ownership is when an individual franchisee assigns his or her rights to a corporation, limited liability company, or other entity controlled by the same individual. |
Source: Item 6 — OTHER FEES (FDD pages 10–15)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, a franchisee may transfer ownership for convenience without incurring a transfer fee. This applies when an individual franchisee assigns their rights to a corporation, limited liability company, or another entity they control. However, the franchisee is still responsible for reimbursing Ella Cafe's attorney fees associated with the transfer.
This provision is beneficial for franchisees who wish to structure their business under a corporate entity for liability or tax purposes without incurring a significant transfer fee. It is a fairly standard practice in franchising to allow such transfers for convenience, but it is important to note that Ella Cafe does require reimbursement for their legal costs.
Prospective Ella Cafe franchisees should carefully consider the implications of this policy and factor in potential legal fees when planning for ownership transfers. It would be prudent to discuss with Ella Cafe what typical attorney fees might be expected for such a transfer to better prepare for this expense.