Under what conditions are transfer fees collectable for a Hck Hot Chicken franchise in Washington?
Hck_Hot_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Payment of Fees. In consideration for the Requested Assignment, Former Franchisee acknowledges and agrees to pay Franchisor the Transfer Fee, as required under the Franchise Agreement ("Franchisor's Assignment Fee").
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- Assignment and Assumption. Former Franchisee hereby consents to assign all of its rights and delegate its duties with regard to the Former Franchise Agreement and all exhibits and attachments thereto from Former Franchisee to New Franchisee, subject to the terms and conditions of this Agreement, and conditioned upon New Franchisee's signing the New Franchise Agreement pursuant to Section 5 of this Agreement.
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- Consent to Requested Assignment of Franchised Business. Franchisor hereby consents to the Requested Assignment of the Franchised Business from Former Franchisee to New Franchisee upon receipt of the Franchisor's Assignment Fee from Former Franchisee and the mutual execution of this Agreement by all parties. Franchisor waives its right of first refusal set forth in the Former Franchise Agreement and waives any obligation for Former Franchisee to enterinto a subordination agreement pursuant to the Former Franchise Agreement.
Source: Item 22 — CONTRACTS (FDD pages 54–55)
What This Means (2025 FDD)
According to Hck Hot Chicken's 2025 Franchise Disclosure Document, the transfer fee is collectable when a former franchisee requests to assign their franchise to a new franchisee. Specifically, the former franchisee acknowledges and agrees to pay Hck Hot Chicken the transfer fee as required under the franchise agreement in consideration for the requested assignment.
This means that if a franchisee in Washington state decides to sell their Hck Hot Chicken franchise to someone else, they will be responsible for paying a transfer fee to Hck Hot Chicken. This fee is a condition for Hck Hot Chicken's approval of the transfer. The new franchisee must also sign Hck Hot Chicken's current franchise agreement to complete the transfer.
Furthermore, Hck Hot Chicken consents to the assignment of the franchised business from the former franchisee to the new franchisee upon receiving the transfer fee from the former franchisee and the mutual execution of the assignment agreement by all parties involved. This agreement also states that Hck Hot Chicken waives its right of first refusal and any obligation for the former franchisee to enter into a subordination agreement, which might otherwise be required.