What is the definition of the term "Transfer Fee" in the context of a Pump It Up franchise?
Pump_It_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
r Approval of Transfer.
- (1) You must advise us in writing of any proposed Transfer, submit to us (or cause the proposed transferee to submit) a franchise application for the proposed transferee and a copy of all contracts and all other agreements 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 Fee is required when a franchisee sells their franchise to a new owner. The Transfer Fee for Pump It Up is between $10,000 and $20,000, depending on the amount of initial training and support the new franchisee will require.
Before the transfer process can begin, the franchisee must provide written notice of their intent to transfer the franchise and pay a $3,000 deposit towards the Transfer Fee. This Transfer Deposit is non-refundable and covers the costs associated with reviewing the transfer documentation. If the transfer does not proceed and the prospective transferee has not attended any portion of the Training Program, the Transfer Deposit can be applied to a subsequent transfer that closes within 12 months of the initial transfer application.
The Transfer Fee is intended to reimburse Pump It Up for the reasonable expenses associated with reviewing the transfer. However, the Transfer Fee will be waived under certain circumstances: (1) if the proposed transferee is an entity formed by the franchisee for convenience of ownership, or (2) if the franchise is obtained as a result of the franchisee's death or permanent incapacity. If the proposed transferee comes through an investigation process with a franchise sales broker that Pump It Up has retained, the transferee must pay the then-current Initial Franchise Fee instead of the Transfer Fee.
Pump It Up's approval of a proposed transfer is at their sole discretion and will include numerous factors, including whether the proposed transferee meets the current standards for new franchisees, has sufficient business experience, aptitude, and financial resources, has paid all amounts owed to Pump It Up and is not in violation of the Franchise Agreement, and satisfactorily completes the initial training program.