Where can I find the applicable transfer fee for an Engineering For Kids franchise?
Engineering_For_Kids Franchise · 2025 FDDAnswer from 2025 FDD Document
cluding to cooperate with us in obtaining the information that we need in order to review and consider the qualifications of a prospective transferee and to provide us with a copy of the purchase agreement with the buyer.
14.4. Transfer Fee
For a proposed Transfer of the Franchised Business or this Agreement (or, if you are a corporation or other entity, a Transfer of ownership interests that would result in a change of control of your entity), you must pay to us a Transfer fee in the amount of Five Thousand Dollars ($5,000), unless the Transfer qualifies for the reduced fee for a partial interest Transfer under Section 14.5 below.
14.5. Transfer of Partial Ownership Interest
For any proposal to admit a new Owner, to remove an existing Owner, or to change the distribution of ownership shown on the cover page, or for any other transaction that amounts to the Transfer of a partial interest in the Franchised Business, and provided that all such changes would not result in a change of control of your entity, you must give us advance notice and submit a copy of all proposed contracts and other information concerning the Transfer that we may request. Provided that you provide us with all information and documents that we request in connection with the partial Transfer under this Section 14.5, we will reduce the transfer fee payable to us to One Thousand Four Hundred Dollars ($1,400). We will have a reasonable time (not less than thirty (30) days) after we have received all requested information to evaluate the proposed Transfer. You must satisfy the conditions in Sections 14.3.2(a), 14.3.3, 14.3.4, 14.3.5, and 8.4 above in connection with any such Transfer. We may withhold our consent on any reasonable grounds or give our consent subject to reasonable conditions. You acknowledge that any proposed new owner must submit a personal application and execute a personal guarantee in the same form signed by the original Owners.
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Source: Item 23 — RECEIPTS (FDD pages 53–138)
What This Means (2025 FDD)
According to the 2025 Engineering For Kids FDD, the transfer fee for transferring a partial ownership interest is $1,400. This fee applies when admitting a new owner, removing an existing owner, changing the ownership distribution, or any transaction that transfers a partial interest, provided it doesn't change the entity's control. To qualify for this reduced fee, the franchisee must provide all requested information and documents related to the partial transfer, allowing Engineering For Kids a reasonable evaluation period of at least 30 days after receiving all necessary information.
However, the FDD states that Engineering For Kids will not impose a transfer fee if the franchise agreement is assigned to a corporation, partnership, or limited liability corporation formed for ownership convenience, provided certain conditions are met. These conditions include the entity's sole business being the Engineering For Kids Business, adherence to specific sections outlined in the FDD, and the owners maintaining equity interests in the new entity in the same proportion as before. In this case, the franchisee is only responsible for reimbursing Engineering For Kids for any out-of-pocket expenses incurred during the review and documentation of the transfer.
Prospective Engineering For Kids franchisees should note that these transfer provisions are subject to Engineering For Kids's approval, and the franchisor may withhold consent on reasonable grounds or impose reasonable conditions. Additionally, any proposed new owner must submit a personal application and guarantee. It is important for potential franchisees to carefully review Section 14 of the franchise agreement, as referenced in the provided excerpts, to fully understand the conditions and requirements for transferring ownership interests.