What is the initial deposit required when requesting approval of a transfer for an Extreme Art Studio Business?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
the provisions of which may differ materially from any and all of those contained in this Franchise Agreement, including the Royalty and the Marketing Fees; provided, however, that the term of the new franchise agreement signed will equal the remainder of the then-remaining term of this Franchise Agreement;
- (g) you pay us a transfer fee for each Extreme Art Studio Business to be transferred equal to $10,000 per
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio Franchise Disclosure Document, a franchisee must pay a nonrefundable deposit of $1,000 per Extreme Art Studio Business when requesting approval for a transfer. The remaining balance of the transfer fee is due when the transfer documents are executed.
This deposit indicates Extreme Art Studio's need to cover initial administrative costs associated with reviewing and potentially approving the transfer. The fact that it is nonrefundable means that even if the transfer does not proceed, the franchisee will not get this money back. This policy is fairly standard in franchising, as the franchisor expends resources evaluating the proposed transfer regardless of the outcome.
In addition to the deposit and transfer fee, the franchisee is responsible for broker fees and any required training costs for the transferee. This could potentially add significant costs to the transfer process. The FDD also stipulates other conditions for transfer, such as the transferee completing the initial training program and signing the current franchise agreement, which may have terms that differ from the original agreement.
Prospective franchisees should carefully consider these transfer-related costs and conditions, as they can impact the financial viability of selling their Extreme Art Studio franchise in the future. It is important to factor in these potential expenses when evaluating the overall investment and potential return on investment of an Extreme Art Studio franchise.