What is the Red Wagon Club transfer fee if shares are being transferred between existing owners?
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-current Initial Franchise Fee. |
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 is $1,500 if shares are being transferred between existing owners, or if a new shareholder is being added that does not change the majority ownership. This fee is notably lower than the standard transfer fee, which is 75% of the then-current Initial Franchise Fee.
The standard transfer fee applies when there is a transfer of the Red Wagon Club business' ownership, possession, control, or substantially all of its assets. This higher fee covers Red Wagon Club's costs for assessing the transferee's qualifications, providing training, and offering early support.
The reduced fee for transfers between existing owners suggests that Red Wagon Club aims to facilitate internal ownership adjustments without imposing a significant financial burden, as long as the majority ownership remains unchanged. This can be beneficial for partnerships or groups of owners who may need to adjust their ownership structure over time. However, it is important to note that any transfer that results in a change of majority ownership would be subject to the higher transfer fee.