Is a Ledgers franchisee required to pay a transfer fee for a transfer to a Controlled Entity?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
7.4. Transfer to Controlled Entity
A "Controlled Entity" is an entity in which you are the beneficial owner of 100% of each class of voting ownership interest. A transfer to a "Controlled Entity" will not trigger the Right of First Refusal. At the time of the desired transfer of interest to a Controlled Entity, you must notify us in writing of the name of the Controlled Entity and the name and address of each officer, director, shareholder, member, partner, or similar person and their respective ownership interest. Each such person of the Controlled Entity must sign the then-current amendment and release forms or Franchisee Agreement as required by us. We do not charge a transfer fee for this change.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, a franchisee is not required to pay a transfer fee when transferring their interest to a Controlled Entity. A "Controlled Entity" is defined as an entity where the franchisee maintains beneficial ownership of 100% of each class of voting ownership interest.
To complete the transfer, the franchisee must notify Ledgers in writing, providing the name of the Controlled Entity and the name and address of each officer, director, shareholder, member, partner, or similar person, along with their respective ownership interest. Each person within the Controlled Entity must also sign Ledgers' then-current amendment and release forms or Franchisee Agreement, as required by Ledgers.
This policy of waiving the transfer fee for transfers to a Controlled Entity can be beneficial for franchisees who wish to structure their business for tax or liability purposes without incurring additional costs. It allows flexibility in how the franchise is owned and operated, as long as the original franchisee retains full control and ownership.