To what extent are transfer fees collectable from an Embassy Suites franchisee in Washington?

According to the 2025 Embassy Suites Franchise Disclosure Document, the collection of transfer fees from franchisees in Washington is subject to specific regulations under the Washington Franchise Investment Protection Act. Specifically, transfer fees are collectable only to the extent that they accurately reflect Embassy Suites' reasonable estimated or actual costs incurred during the transfer process. This means Embassy Suites cannot impose arbitrary or inflated transfer fees; the fees must be justifiable based on the expenses they incur.

This provision protects prospective Embassy Suites franchisees in Washington by ensuring that they are not subjected to excessive or unreasonable transfer fees. It allows for a more transparent and fair transfer process, as the fees must be tied to actual costs. This contrasts with some franchise agreements that might stipulate fixed transfer fees regardless of the franchisor's actual expenses.

For a potential Embassy Suites franchisee in Washington, it is crucial to understand this aspect of the Washington Franchise Investment Protection Act. During any transfer process, franchisees should request a detailed breakdown of the costs that constitute the transfer fee to ensure they align with the franchisor's reasonable expenses. This helps in avoiding disputes and ensures compliance with Washington state law.