A fee paid to the franchisor when a franchisee sells their unit to a new owner — typically $5,000-$15,000 — covering the franchisor's cost of qualifying, training, and onboarding the new operator.
Transfer fees compensate the franchisor for the operational work of approving and onboarding a new franchisee when an existing franchisee sells their unit. The fee is disclosed in Item 6 and typically runs $5,000-$15,000 in 2026 — covering candidate qualification, retraining, document preparation, and the franchisor's transfer-approval administrative cost.
Transfer fees also discourage casual ownership flipping. A franchisee who knows transferring out costs $10,000+ has more incentive to operate the unit seriously rather than treating it as a short-term asset.
Most franchise agreements also reserve the franchisor's right of first refusal — meaning the franchisor can match any third-party offer to acquire the franchisee's unit. This protects against transfers to operators who don't fit the system, and gives the franchisor the option to consolidate units when strategically valuable.
The transfer process is also a quality-control checkpoint. The new buyer must qualify under the same criteria as a brand-new franchisee, complete training, and accept current franchise agreement terms (which may have evolved since the original franchisee signed).
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Book a 30-min strategy callThe FDD section that discloses every recurring or contingent fee a franchisee will or might pay during the franchise relationship — royalties, brand fund, technology, transfer, audit, late fees, and more.
A franchise agreement provision that lets the franchisor match any third-party offer to acquire a franchisee's unit — protecting the franchisor against transfers to operators who don't fit the system.
A fee paid by an existing franchisee to renew their franchise agreement at the end of its term — typically 25-50% of the then-current initial franchise fee.