What is the standard transfer fee for a Red Wagon Club franchise?
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 Franchise Disclosure Document, the standard transfer fee is 75% of the then-current initial franchise fee. This fee is applicable when a franchisee transfers their agreement or a controlling interest in their franchise.
However, the FDD outlines exceptions to the standard transfer fee. If the transfer involves a non-controlling interest in the Red Wagon Club business between existing employees, or between an existing employee and a new shareholder, the transfer fee is $1,500. Additionally, if the transfer is to an existing Red Wagon Club franchisee, the transfer fee is reduced to 33% of the then-current initial franchise fee.
It's important to note that the transferee might be required to sign Red Wagon Club's current form of franchise agreement, which could have different provisions than the original agreement. These differences could include changes to the program fee, brand fund contribution, or territorial protections. However, the term of the new franchise agreement will be the remainder of the original term.