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Transfer fee benchmarks

So, you bought a franchise and it’s been successful for a few years and now you want to sell it.  The franchisor reserves some influence and financial discouragement.  The two biggest considerations given to the franchisor are:

  1. Right of first refusal – the franchisor can match your highest legitimate offer and buy your franchise
  2. Transfer fee – a fee you must pay to the franchisor for the privilege of transferring your licensing rights and obligations to another party

Sample Transfer fees:

FOOD:

  • Pizza Factory: $12,000
  • Quizno’s: $5,000
  • Dominic’s of New York: $1,000 + 6% of sales price
  • Submarina: $1,000
  • Cheeburger Cheeburger: $12,250
  • Pizza Patron: $5,000
  • The Dugout: $5,000
  • Arby’s: $13,500
  • Doc Green’s Gourmet Salad: negotiated at time of sale
  • Jerq’zine:  $10,000
  • Original Hamburger Stand: $250
  • Sub Station II: $5,000
  • Steak-Out: $18,750
  • Fazoli’s: Reaonable attorney, accounting, training and other related costs

OTHER:

  • Bartercard: 10% of sales price
  • Herman’s World of Sports: $12,500
  • Sears Carpet and Upholstery: $3,000 – $6,000 (depends on market size)
  • Stone Mountain Carpet Mill Outlet: $2,500
  • Screenz:  $5,000
  • Tax Centers of America: $1,000
  • Sports Clips: $25,000
  • Fantastic Sams: $20,000 or 10% of sales price (whichever is greater)
  • Hair Cuttery: $5,000 ($0 if franchisee for 5+ years)
  • Fastframe: 5-10% of purchase price

 

About Ryan Knoll

Attorney and advisor with an interest in franchising. Feel free to email me comments and questions on the "Contact Us" page.
2 comments
Trevor Frisk
Trevor Frisk

DAMN! Those haircutting places of HUGE transfer fees. WHY?