Under what conditions are Precision Door Service transfer fees collectable?
Precision_Door_Service Franchise · 2025 FDDAnswer from 2025 FDD Document
unreasonably. You immediately must notify us of any proposed Transfer and must submit promptly to us the application for consent to Transfer. Any attempted Transfer by you without our prior written consent or otherwise not in compliance with the terms of this Agreement will be void and will provide us with the right to elect either to default and terminate this Agreement or to collect from you and the guarantors a Transfer fee equal to two times the Transfer fee provided for in Section 10.C as damages.
- C. Transfer Fee. You must pay to us a Transfer fee in the amount equal to $20,000. We will reduce the Transfer fee to $500 for a Transfer to an immediate family member (i.e., a spouse or a child; for avoidance of doubt, a sibling is not considered an immediate family member for this purpose). The Transfer fee is nonrefundable. You will not be required to pay a Transfer fee if you are an individual and wish to Transfer this Agreement to a newly formed legal entity wholly owned by you and established solely for purposes of the convenience of ownership and the operation of the Business; provided that you must become a guarantor of the Business as required under Section 6.A.
- D. Conditions of Transfer. We condition our consent to any proposed Transfer, whether to an individual, a corporation, a partnership or any other entity, upon the following:
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- Assignee Requirements. The Assignee must meet all of our then-current requirements for our PRECISION GARAGE DOORSERVICE®franchise program we are offering at the time of the proposed Transfer, sign our then-current form of franchise agreement, and its owners must become guarantors of the Business as required under Section 6.A.
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- Payment of Amounts Owed. All amounts owed by you to us, or any of our affiliates or your suppliers, or upon which we or our affiliates have any contingent liability, must be paid in full.
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- Reports. You must have provided all required reports to us.
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- Guarantee. In the case of an installment sale for which we have consented to you or any owner retaining an interest or other financial interest in this Agreement or the Business, you or such owner, and the guarantors, are obligated to guarantee the performance under this Agreement until the fin
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Source: Item 22 — Contracts (FDD pages 91–92)
What This Means (2025 FDD)
According to the 2025 Precision Door Service Franchise Disclosure Document, a transfer fee is generally required for any transfer of the franchise agreement. The standard transfer fee is $20,000. However, this fee is reduced to $500 if the transfer is to an immediate family member, defined as a spouse or child. A sibling does not qualify as an immediate family member for the reduced fee.
The transfer fee is waived entirely if an individual franchisee transfers the agreement to a newly formed legal entity wholly owned by them, established solely for ownership convenience and business operation. In this case, the franchisee must become a guarantor of the business. The transfer fee is nonrefundable in all applicable cases.
Precision Door Service also stipulates conditions that must be met for any proposed transfer to be approved. The assignee must meet the then-current requirements for Precision Door Service's franchise program, sign the current franchise agreement, and have its owners become guarantors of the business. All outstanding amounts owed to Precision Door Service, its affiliates, or suppliers must be paid in full. Additionally, all required reports must be submitted, and in the case of an installment sale, the transferor must guarantee performance until the sale's final close. The assignee must assume all customer obligations, including warranty work and service plans, and the transferor must sign a general release of all claims against Precision Door Service and its affiliates.