What is the definition of the term "Transfer Deposit" in the context of a Pump It Up franchise?
Pump_It_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
nts or proposals, and all other information requested by us, relating to the proposed Transfer. Along with that required information, you must pay a transfer fee (the "Transfer Fee"). The Transfer Fee you will pay us is currently between $10,000 and $20,000 depending upon the amount of initial training and support that you will require. With your written notice of your intent to transfer the Franchised Business, you will pay us a deposit towards the Transfer Fee in the amount of $3,000 (the "Transfer Deposit"). The Transfer Deposit must be paid before the proposed Transferee arrives for the Training Program to cover our costs to begin to review the transfer documentation. The Transfer Deposit is non-refundable. If the proposed Transfer does not close and the prospective transferee has not attended any portion of our Training Program, we shall apply the Transfer Deposit against the Transfer Fee for any subsequent transfer that you close within the 12-month period following your initial transfer application. If we do not exercise our right of first refusal (as set forth in Section 16.G.), the decision as to whether or not to approve a proposed Transfer will be made by us in our sole discretion and will include numerous factors deemed relevant by us. These factors may include, but need not be limited to, the following:
- (a) the proposed transferee meets our then-current standards for new franchisees and has sufficient business experience, aptitude, and financial resources to operate the Franchised Business;
- (b) you have paid all amounts owed to us, our affiliates, and third-party vendors, have submitted all required reports and statements to us, and are not in violation of this Agreement;
- (c) neither the proposed transferee nor its owners or affiliates have an ownership interest (direct or indirect) in or perform services for a Competing Business (as
Source: Item 23 — RECEIPTS (FDD pages 60–225)
What This Means (2025 FDD)
According to Pump It Up's 2025 Franchise Disclosure Document, a 'Transfer Deposit' is a deposit of $3,000 that a franchisee must pay to Pump It Up when they provide written notice of their intent to transfer their franchised business. This deposit contributes to the overall Transfer Fee, which ranges from $10,000 to $20,000, depending on the initial training and support the new franchisee will need. The Transfer Deposit is required before the proposed transferee begins the Training Program, and it covers Pump It Up's costs to review the transfer documentation.
Notably, the Transfer Deposit is non-refundable. However, if the transfer does not proceed and the prospective transferee hasn't participated in any part of the Training Program, Pump It Up will apply the deposit towards the Transfer Fee for any subsequent transfer that closes within 12 months of the initial transfer application. This provides some flexibility for franchisees who may have an initial transfer fall through but are actively seeking another buyer.
Pump It Up retains the sole discretion to approve or deny a proposed transfer if they do not exercise their right of first refusal. Their decision will be based on factors such as whether the proposed transferee meets the current standards for new franchisees, has sufficient business experience and financial resources, has paid all outstanding amounts to Pump It Up and its affiliates, and does not have an ownership interest in a competing business. The transferee must also satisfactorily complete the initial training program and pay any associated training fees.