Under what circumstances is a transfer considered a 'transfer for convenience of ownership' for an Ella Cafe franchise?
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 transfer is considered to be 'for convenience of ownership' when an individual franchisee assigns their rights to a corporation, limited liability company, or other entity that is controlled by the same individual.
In such cases, Ella Cafe does not charge a transfer fee, but the franchisee is responsible for reimbursing Ella Cafe's attorney fees associated with the transfer. This is a notable benefit for franchisees who may want to structure their business under a corporate entity for liability or tax purposes without incurring a significant transfer fee.
It is important for prospective Ella Cafe franchisees to understand the specific conditions under which a transfer fee is waived, as outlined in the FDD. While a 'transfer for convenience' allows for restructuring of ownership without a fee, other types of transfers, such as selling the business to a new owner, will incur a transfer fee.