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:
- Right of first refusal - the franchisor can match your highest legitimate offer and buy your franchise
- 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
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Interesting.
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Excellent post, thanks FranchisePundit!
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DAMN! Those haircutting places of HUGE transfer fees. WHY?
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