What is the minimum transfer fee for the Face Foundrie Area Development Agreement?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
- 7.4 Transfer Fee*.* At the request of Franchisor, Area Developer shall pay a transfer fee of an amount equal to Franchisor's then-current Franchise Fee for each Franchised Facial Bar that remains to be developed and opened in order to satisfy the Development Schedule, but not less than fifty percent (50%) of the Area Development Fee paid.
Additionally, for any Franchise Agreements executed pursuant to this Agreement that are transferred, the transfer fee due under such Franchise Agreement(s) shall be paid to Franchisor pursuant to the terms of such Franchise Agreement(s).
- 7.5 Transfer to Entity Formed for by Area Developer*.* Notwithstanding anything to the contrary in this Section 7, if Area Developer is an individual and seeks to transfer this Agreement to a corporation, partnership, or limited liability company formed for the convenience of ownership, the conditions of Sections 7.4 shall not apply, and Area Developer may undertake such transfer, provided that: (a) Area Developer owns one hundred percent (100%) of the equity interest in the transferee entity; (b) Area Developer and any other Principal(s) personally guarantee, in a written guaranty satisfactory to Franchisor, the performance of the obligations of the Area Developer under this Agreement; (c) Area Developer executes a Transfer of Franchise form as prescribed and approved by Franchisor; (d) such transferee entity is newly organized and its business purpose is confined exclusively to developing and operating the Franchised Facial Bars; and (e) Area Developer and any other Principal(s) execute any and all other ancillary agreements as Franchisor may require.
Source: Item 23 — RECEIPTS (FDD pages 74–257)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, if an Area Developer seeks to transfer their Area Development Agreement, they may be required to pay a transfer fee. This fee will be equal to Face Foundrie's current Franchise Fee for each Franchised Facial Bar that remains to be developed and opened to satisfy the Development Schedule. However, the transfer fee will not be less than fifty percent (50%) of the Area Development Fee that was initially paid.
For a prospective Face Foundrie Area Developer, this means that if they decide to sell their development rights to another party, they should be prepared to pay a transfer fee. The exact amount will depend on the number of locations they still need to develop and the current franchise fee at the time of the transfer. At a minimum, they should expect to pay at least half of what they originally paid for the Area Development Fee.
There is an exception to this transfer fee requirement. If the Area Developer is an individual and wants to transfer the agreement to a business entity (like a corporation or LLC) that they own entirely for the convenience of ownership, the transfer fee conditions do not apply. However, several conditions must be met, including the Area Developer owning 100% of the new entity, providing a personal guarantee, and ensuring the entity's sole purpose is to develop and operate Face Foundrie locations.