What is the transfer fee for Exit franchisees if the transfer is considered a Major Transfer?
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 for an Exit franchise varies depending on whether the transfer is classified as a Major Transfer or a Minor Transfer. If the transfer qualifies as a Major Transfer, the franchisee must pay Exit a transfer fee. This fee is equivalent to 10% of the then-current Initial Fee but will not exceed 25% of the initial franchise fee originally paid.
A Major Transfer is defined as the transfer of 50% or more interest in the Franchise Agreement or 50% or more interest in the equity or voting rights of the entity that owns or controls the Agreement, whether it occurs in one single transfer or multiple transfers. This means that if a franchisee sells a significant portion of their ownership or control, they will be subject to this higher transfer fee.
Conversely, a Minor Transfer involves the transfer of less than a 50% interest in the Agreement or equity/voting rights, or if the transfer is to an entity with the same equity ownership as the transferor. In the case of a Minor Transfer, the transfer fee is a fixed amount of $500.00. Regardless of whether the transfer is major or minor, the transfer fee is non-refundable, even if the proposed transfer does not ultimately occur. It is important to note that no transfer fee is payable if an individual franchisee assigns its interest to a legal entity as per Section 14.2 of the Agreement.