What payments must a Red Wagon Club franchisee make before a transfer can be approved?
Red_Wagon_Club Franchise · 2024 FDDAnswer from 2024 FDD Document
ich may differ materially from any and all of those contained in this Agreement, including the amount of the Program Fee, the Brand Fund contribution, and/or changes to the imposition of territorial protections; provided, however, that the term of the new franchise agreement signed will equal the remainder of the then-remaining Term;
- (9) Franchisee pays Franchisor, or arranges for the payment to Franchisor by the transferee, a transfer fee equal to 75% of Franchisor's then-current Initial Franchise Fee, unless (a) the transfer is o
Source: Item 22 — CONTRACTS (FDD page 47)
What This Means (2024 FDD)
According to the 2024 Red Wagon Club FDD, a franchisee must pay a transfer fee to the Franchisor before a transfer can be approved. This fee is equal to 75% of Red Wagon Club's then-current Initial Franchise Fee.
However, there are exceptions to this general rule. If the transfer involves a non-Controlling Interest in the franchisee's Red Wagon Club business between existing employees, or between an existing employee and a new shareholder, the transfer fee is reduced to $1,500. Additionally, if the transfer is to an existing Red Wagon Club franchisee, the transfer fee is equal to 33% of the then-current Initial Franchise Fee.
It is important to note that the franchisee or the transferee must arrange for the payment of this transfer fee to Red Wagon Club. This condition must be met before the transfer can be finalized and approved by Red Wagon Club.