Under what circumstances is a Golden Corral transfer fee not required?
Golden_Corral Franchise · 2025 FDDAnswer from 2025 FDD Document
- 13.2.2.10 Except in the case of a transfer to a corporation or limited liability company formed for the convenience of ownership, a transfer fee shall be paid by Franchisee to Franchisor in an amount equal to five percent (5%) of the then-current standard initial franchise fee being charged by Franchisor for a restaurant utilizing the restaurant design franchised hereunder (or, if such design is not then offered, such fee for the restaurant design closest in interior square footage to the Restaurant).
Source: Item 22 — CONTRACTS (FDD pages 84–85)
What This Means (2025 FDD)
According to the 2025 Golden Corral Franchise Disclosure Document, a transfer fee is not required when a franchise is transferred to a corporation or limited liability company that was formed for ownership convenience. In most other cases, a transfer fee is required.
If a transfer is made to a corporation or LLC not formed for convenience, the transfer fee is 5% of the then-current standard initial franchise fee being charged by Golden Corral for a restaurant utilizing the restaurant design franchised. If that design is not currently offered, the fee will be based on the restaurant design closest in interior square footage to the Restaurant.
This exception could be beneficial for franchisees looking to structure their business in a way that offers liability protection or tax advantages without incurring additional transfer fees. However, it's important to note that this exception is specifically for entities formed for the convenience of ownership, suggesting that transfers to existing business entities or for other purposes may still be subject to the standard transfer fee.