To what extent are transfer fees collectable from a Petro Stopping Center franchisee in Washington?

According to the 2025 Petro Stopping Center FDD, transfer fees are collectable from a franchisee in Washington to the extent that they reflect Petro Stopping Center's reasonable estimated or actual costs in effecting a transfer. This means that Petro Stopping Center cannot charge arbitrary or inflated transfer fees. The fees must be tied to the actual expenses the company incurs during the transfer process.

This provision protects franchisees in Washington from being charged excessive transfer fees that do not correspond to the franchisor's actual costs. It ensures that the transfer fees are fair and reasonable, preventing the franchisor from profiting unduly from franchise transfers. This is particularly important because transfer fees can be a significant expense for franchisees looking to sell their business.

It is important for prospective franchisees in Washington to understand this protection. When considering a franchise transfer, they should request a detailed breakdown of the estimated or actual costs that make up the transfer fee. If the fee seems unreasonable or not reflective of actual costs, franchisees have grounds to challenge it under Washington law. This addendum to the disclosure document strengthens the franchisee's position in negotiating transfer fees and ensures greater transparency in the transfer process.

This type of provision is not uncommon in franchise agreements, as many states have franchise investment protection acts that aim to protect franchisees from unfair practices. By limiting transfer fees to reasonable costs, Washington's Franchise Investment Protection Act seeks to create a more equitable relationship between franchisors and franchisees during the transfer of ownership.