How is the transfer fee for a Red Wagon Club franchise paid to the franchisor?
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 Red Wagon Club's 2024 Franchise Disclosure Document, the transfer fee is paid either directly by the franchisee or arranged to be paid by the transferee to Red Wagon Club. The amount of the transfer fee depends on the type of transfer.
If the transfer involves the entire franchise agreement, the franchisee is responsible for ensuring the transfer fee is paid to Red Wagon Club. Alternatively, the franchisee can arrange for the transferee (the party acquiring the franchise) to make the payment directly to Red Wagon Club.
There are a couple of exceptions to the standard transfer fee. If the transfer is 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. If the transfer is to an existing Red Wagon Club franchisee, the transfer fee is 33% of the then-current initial franchise fee. Otherwise, the transfer fee is equal to 75% of Red Wagon Club's then-current Initial Franchise Fee.