Does the Red Wagon Club transfer fee cover early support for the transferee?
Red_Wagon_Club Franchise · 2024 FDDAnswer from 2024 FDD Document
reof each month. See Note 3. |
| Type of Fee1 | Amount | Due Date | Remarks |
|---|---|---|---|
| Transfer Fee | 75% of then-current Initial Franchise Fee | At time of transfer | Applies to a transfer of your RWC Business' ownership, possession, or control, or substantially all of its assets. This fee covers our assessment of transferee's qualifications, training, and early support. See Item 17. If shares are being transferred between existing owners, or if a new shareholder is being added that does not change the majority ownership of you, the transfer fee is $1,500. For transfers to existing franchisees, the transfer fee is 33% of the then-c |
Source: Item 6 — OTHER FEES (FDD pages 13–17)
What This Means (2024 FDD)
According to Red Wagon Club's 2024 Franchise Disclosure Document, the transfer fee does cover early support for the transferee. The standard transfer fee is 75% of the then-current Initial Franchise Fee. This fee is paid when a franchisee transfers ownership, possession, or control of their Red Wagon Club business, or substantially all of its assets, to a new owner.
The FDD specifies that this transfer fee covers Red Wagon Club's costs for assessing the transferee's qualifications, providing training, and offering early support to the new franchisee. This suggests that Red Wagon Club provides resources and assistance to ensure the transferee is well-prepared to operate the business.
There are exceptions to the standard transfer fee. If shares are being transferred between existing owners, or if a new shareholder is being added that does not change the majority ownership, the transfer fee is $1,500. For transfers to existing franchisees, the transfer fee is 33% of the then-current Initial Franchise Fee. These reduced fees likely reflect the reduced level of assessment, training, and support required in these situations.