Under what condition are transfer fees collectable for a Ledgers franchise?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
form within ten (10) days and provide us with a written certification of destruction. However, you may retain Confidential Information as needed solely for legal, tax, and insurance purposes, but the information retained will remain subject at all times to the confidentiality restrictions of this Agreement.
Transfer
7.1. Assignment by Us
We may assign this Agreement to an assignee who remains bound by its terms. We do not permit a sub-license of the Agreement.
7.2. Transfer by You
You may transfer your interest in this Agreement or your ownership in the Franchise Business if:
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- you are in full compliance with the Agreement,
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- current in all monies owed to us,
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- we approve of the individual or entity to which you are transferring ("Transferee"), which our consent will not be unreadably withheld;
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- Transferee meets the requirements of Section 7.8.
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- You sign the then current transfer and release form, and
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- You pay to use the transfer fee (if any). See Section 2.11.
7.3. Joint Tenancy
If this Agreement is held by joint tenants or tenants in common, all joint tenants or tenants in common must join in any transfer of an ownership interest in this Agreement, except any person who is deceased or under a legal disability.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers's 2025 Franchise Disclosure Document, a transfer fee may be required when a franchisee transfers their interest in the Franchise Agreement or ownership in the franchise business. This is contingent upon several conditions being met. The franchisee must be in full compliance with the agreement and current on all monies owed to Ledgers.
Ledgers must approve the individual or entity to which the franchise is being transferred, and this approval will not be unreasonably withheld. The transferee must also meet specific requirements outlined in Section 7.8 of the agreement. Additionally, the franchisee must sign the current transfer and release form. Only if all these conditions are met, the franchisee is obligated to pay Ledgers the transfer fee, if any, as detailed in Section 2.11 of the Franchise Agreement.
However, a transfer fee is not charged when the transfer of interest occurs within a franchisee's existing business entity, provided that only the percentage ownership changes and not the identity of the owners. In this scenario, the franchisee must notify Ledgers in writing about the details of the transfer, including the names, addresses, and ownership interests of all relevant parties. These parties must also sign the necessary amendment and release forms or the Franchisee Agreement as required by Ledgers.