Is the transfer fee for an Exit franchise refundable if the proposed transfer does not occur?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
.3](#page-71-1) of this Agreement. The disposition shall be completed within a reasonable time, not to exceed nine (9) months from the date of the death or permanent disability. Failure to so transfer the interest within the nine (9) month period shall constitute a breach of this Agreement.
18.5. Transfer Fee
Franchisee must pay Subfranchisor a transfer fee, which will vary depending on whether the Transfer is a Major Transfer or a Minor Transfer. If the Transfer is a Major Transfer, the transfer fee is an amount equal to 10% of the then current Initial Fee (not to exceed 25% of the Initial Franchise fee paid) on the date of the Transfer. If the Transfer is a Minor Transfer, the transfer fee is an amount equal to $500.00. The transfer fee is nonrefundable even if, for any reason, the proposed Transfer does not occur. For purposes of this section, the following definitions apply:
(A) Major Transfer. The Transfer of a 50% or more interest in this Agreement or 50% or more interest in the equity or voting rights in the entity that owns or controls this Agreement, whether in one or more transfers.
(B) Minor Transfer. Transfer of less than a 50% interest in this Agreement, or less than 50% interest in the
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the transfer fee is nonrefundable. If a franchisee attempts to transfer their franchise, they must pay a transfer fee to the subfranchisor. The amount of the transfer fee depends on whether the transfer is classified as a Major Transfer or a Minor Transfer.
For a Major Transfer, which involves transferring 50% or more interest in the franchise agreement or the entity controlling it, the transfer fee is 10% of the then-current initial fee, but it will not exceed 25% of the initial franchise fee paid. For a Minor Transfer, which involves transferring less than 50% interest, the transfer fee is $500.00.
It is important to note that the transfer fee is nonrefundable, regardless of whether the transfer is completed. However, a franchisee does not have to pay a transfer fee to the subfranchisor if an individual franchisee assigns its interest to a legal entity according to Section 14.2 of the agreement.