What is the transfer fee for a Red Wagon Club franchise if the transfer is to an existing Red Wagon Club franchisee?
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 transfer fee for an existing Red Wagon Club franchisee is equal to 33% of the then-current Initial Franchise Fee. This means that if a franchisee decides to sell their franchise to someone who already owns a Red Wagon Club franchise, the transfer fee will be lower than if they were selling to a new franchisee.
This reduced fee could incentivize existing franchisees to expand their operations by acquiring additional locations. It also makes it more attractive for existing franchisees to purchase an underperforming location, as the transfer fee is significantly reduced.
It is important to note that the 'then-current Initial Franchise Fee' can change over time, so the actual dollar amount of the transfer fee will depend on what the initial franchise fee is at the time of the transfer. Franchisees should confirm the current initial franchise fee with Red Wagon Club before initiating a transfer.