Franchise Glossary
Transfer Fee
What is Transfer Fee in franchising?
A fee paid to the franchisor when a franchise unit is sold from one owner to another. Transfer fees cover the franchisor's cost of processing the new franchisee application, providing training, and updating agreements. They typically range from $5,000–$25,000 and are disclosed in FDD Item 6. Understanding transfer fees is part of exit planning, as they directly affect the net proceeds a seller receives.