What is the transfer fee required by Hawaiian Bros Island Grill when a Developer transfers their interest?
Hawaiian_Bros_Island_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchised Restaurant, pledge, hypothecation, inter-vivos transfer or testamentary disposition, in each case, whether voluntary or involuntary, and the grant of rights to convert any debt or other obligation or instrument into an Ownership Interest, including warrants, options, and convertible debt. Without limiting Company's right to consent or withhold consent to a proposed transfer, whether to an individual or any Business Entity, Company's consent to any transfer will be conditioned on the following: (1) a proposed transferee that is a new Hawaiian Bros franchisee must meet Company's then-current criteria for new franchisees entering the System, (2) a proposed transferee that is an existing Hawaiian Bros franchisee must meet Company's then-current criteria for existing franchisees desiring to expand within the System beyond their commitments under their existing Development Agreement(s), (3) Franchisee must satisfy all of its outstanding obligations to Company or its Affiliates, (4) the Franchised Restaurant and Restaurant Premises must be in compliance with Company's then-current Standards, (5) the proposed transferee and the transferee's General Manager must satisfactorily complete Company's training program, (6) the transferee (or the Franchisee, if an Ownership Interest is transferre
Source: Item 23 — RECEIPTS (FDD pages 77–262)
What This Means (2025 FDD)
According to the 2025 Franchise Disclosure Document, Hawaiian Bros Island Grill requires a transfer fee when a Developer seeks to transfer their interest in the Development Agreement. Specifically, the FDD states that the Developer must pay Hawaiian Bros Island Grill a transfer fee prior to any transfer.
The amount of the transfer fee for a Hawaiian Bros Island Grill franchise is not specified within the context of transfers by a 'Developer.' However, for a regular franchisee, the transfer fee is $10,000. The FDD stipulates several conditions that must be met before Hawaiian Bros Island Grill will consent to a transfer. These conditions include the proposed transferee meeting the then-current criteria for new franchisees, the Developer satisfying all outstanding obligations to Hawaiian Bros Island Grill, and the transferee executing the then-current form of Development Agreement.
Furthermore, the Developer and each Principal must provide Hawaiian Bros Island Grill with an unconditional, general release of all claims against the company and its affiliates. The Developer must also comply with any other conditions that Hawaiian Bros Island Grill reasonably requires as part of its transfer policies. These stipulations ensure that any transfer aligns with the standards and interests of Hawaiian Bros Island Grill and that the new party is fully committed to the obligations and responsibilities of the Development Agreement.
Prospective Hawaiian Bros Island Grill franchisees should carefully review the conditions and potential costs associated with transferring their development rights, as these can significantly impact the financial and operational aspects of their investment. Given that the transfer fee for a Developer is not explicitly stated, it would be prudent for potential Developers to seek clarification from Hawaiian Bros Island Grill regarding the specific transfer fee applicable to their Development Agreement.