Franchise Transfer Fee Fact Sheet: What 259 FDDs Charge to Sell or Renew

Franchise transfer fee data in 12 numbers

Each figure below comes from our reading of Item 6 (Other Fees) in the same 259 franchise disclosure documents (FDDs) used in our franchise royalty rates report, filed with the Minnesota Department of Commerce and issued 2025-01-24 to 2026-08-18. Where Item 6 points to the franchise agreement, we read that section too.

1. 97.7% of 259 FDDs issued 2025 to 2026 list a transfer fee in Item 6 (253 FDDs).
2. $10,000 is the median franchise transfer fee for a full sale to a new buyer, where the fee can be stated in dollars (245 FDDs; middle half $7,500 to $22,500).
3. 69.0% of those fees are $10,000 or more (169 of 245); 22.0% are $25,000 or more.
4. 55.7% of transfer fees are a flat dollar amount; 26.9% are a percentage of the initial franchise fee; 14.2% use a ‘greater of’ formula.
5. $10,000 is the most common flat transfer fee (47 of 141 flat fees).
6. 26.7% is the median transfer fee as a share of the same FDD’s initial franchise fee; only 23.6% fall between 40% and 60%.
7. 8.7% of transfer fees are tied to the sale price (22 FDDs), most often at 5% of the price.
8. 89.3% of FDDs with a transfer fee waive, reduce or limit it to costs for at least one transfer type; 66.8% do so for a move into your own company.
9. 34.7% of FDDs add a broker, referral or finder charge on a sale (90 FDDs); 18.1% charge extra when the franchisor supplies the buyer.
10. 29.3% of FDDs charge the buyer a separate training fee (median $4,000 where stated).
11. 88.9% of FDDs that offer renewal charge a renewal fee (217 of 244); the median is $8,750, and the median ratio of renewal fee to initial fee is 18.7%.
12. 44.7% of FDDs with a transfer fee name the buyer as payer or let either side pay (113 FDDs).

How franchise transfer fees are structured

Most franchisors write the transfer fee as a fixed dollar amount. Of the 253 FDDs that list a transfer fee, 141 (55.7%) state a flat amount, 68 (26.9%) state a percentage of the initial franchise fee and 36 (14.2%) charge the greater of two measures, usually a dollar floor or a share of the initial fee against a percentage of the sale price. 6 FDDs list no transfer fee in Item 6.

Formulas tied to the initial fee usually point to the franchisor’s then-current fee, so the dollar amount rises when the franchisor raises its initial fee. The FTC Franchise Rule allows this as long as the formula is disclosed (16 CFR 436.5(f)). Among formulas that use the initial fee, 50% is the most common percentage (31 FDDs), followed by 100% (12) and 25% (11). 22 FDDs (8.7%) tie the fee to the sale price, with a median of 5% of the price.

On top of the fee, 46 FDDs (18.2%) also make the seller or buyer pay the franchisor’s legal or processing costs for the transfer.

How much the franchise transfer fee is in dollars

For 245 FDDs the fee for a full sale to a new buyer can be stated in dollars: a flat amount, a percentage of today’s initial fee, or the dollar floor of a greater-of formula. The median is $10,000 and the middle half runs from $7,500 to $22,500. 169 of 245 (69.0%) are $10,000 or more, so the five-figure part of the common claim holds for most systems; 76 (31.0%) are below $10,000.

The top of the range is set by hotels. Lodging brands treat a change of ownership as a new application and charge the then-current application or affiliation fee, which pushes the sector median to $70,000. Without lodging, the median stays at $10,000 and the highest fee is $56,250.

A dollar floor is a minimum. Where a formula also uses a percentage of the sale price, the fee on a large sale can be higher than the figure counted here.

Is a franchise transfer fee half the initial fee?

Usually not. Dividing each FDD’s transfer fee by its own standard initial franchise fee gives a median of 26.7% across 242 FDDs (middle half 16.7% to 50.0%); without lodging the median is 25.0%. Exactly 50% is the single most common ratio (41 FDDs, 16.9%), which may be where the rule of thumb comes from, but only 57 FDDs (23.6%) sit between 40% and 60%. 99 FDDs charge under a quarter of the initial fee, and 20 (8.3%) charge 100% or more, mostly hotels (15 of the 20).

A restaurant broker’s article states that transfer fees are ‘generally’ 50% of the initial fee (EATS Broker, 2021); it cites no data. In this sample, half the initial fee is a common anchor, not the norm.

Different fees for different kinds of transfer

A franchise transfer fee is often tiered by who receives the business. 226 of 253 FDDs (89.3%) waive, reduce or limit to costs the fee for at least one kind of transfer. The most common relief is for moving the franchise into a company you own: 169 FDDs (66.8%) waive or cut the fee for that step, 121 of them to zero. The FTC’s own sample Item 6 table shows the same pattern, a transfer fee with no charge for a transfer to a corporation the franchisee controls (FTC Franchise Rule Compliance Guide).

Transfers on death or disability are less often relieved: 108 FDDs (42.7%) waive, reduce or limit the fee to costs, while 124 apply the standard transfer conditions to heirs. Minority stakes, moves between existing owners and sales to an existing franchisee get relief in 116 FDDs (45.8%), most often a reduced fee.

State law can override the contract for some of these cases. In Iowa, succession to a spouse or heir on death and the incorporation of a sole proprietorship are not transfers that need consent and may not trigger penalties (Iowa Code 523H.5(12)). Our franchise relationship laws tracker covers state rules.

Extra charges when a broker or the franchisor finds the buyer

90 of 259 FDDs (34.7%; 95% interval 29.2% to 40.7%) add a charge tied to how the buyer was found. They fall into two groups.

• Franchisor-found buyer fees. 47 FDDs (18.1%) charge a resale assistance fee, lead or referral fee, or sales commission when the franchisor, its affiliate or its resale program supplies the buyer, or when the buyer was already in the franchisor’s lead database. Where stated in dollars, the median is $15,000 (21 FDDs); where stated as a share of the sale price, the median is 8% (23 FDDs).
• Broker pass-throughs. 43 FDDs (16.6%) make the seller reimburse broker, finder or referral commissions the franchisor pays, usually written as ‘plus any broker fees’ after the transfer fee.

84 of the 90 charges come on top of the ordinary transfer fee. 6 FDDs (2.3%) let a broker- or franchisor-sourced sale trigger a charge up to the full initial franchise fee. The angle that ‘a meaningful minority’ add such charges holds: about one FDD in three, or about one in six if only franchisor-found buyers count. Charges a seller owes to its own business broker are not counted, because the franchisor does not impose them.

Training fees for the buyer

When a franchise changes hands, FDDs differ on who pays for the buyer’s training. 76 FDDs (29.3%) charge a separate training fee for the buyer; where a dollar amount is stated the median is $4,000 (51 FDDs, middle half $995 to $7,200). 16 FDDs (6.2%) say the transfer fee covers the buyer’s training. 64 require training at the buyer’s own expense with no tuition named, and 103 do not say who pays.

Iowa lets a franchisor require a transferee to complete a reasonable training program as a condition of transfer (Iowa Code 523H.5(3)(a)).

Franchise renewal fees: structures and amounts

217 of the 244 FDDs that offer renewal (88.9%; 95% interval 84.4% to 92.3%) charge a renewal fee. 11 offer renewal with no fee, 16 offer it without stating a fee, and 15 give no right to renew, 9 of them hotel brands. 134 renewal fees are a flat amount and 67 are a percentage of the initial fee.

The median renewal fee is $8,750 (middle half $5,000 to $12,500; 213 FDDs), a median 18.7% of the initial fee. Renewal usually costs less than a sale: where both fees are stated in dollars, the renewal fee is lower in 117 of 206 FDDs (56.8%), equal in 59 and higher in 30.

The fee is only part of the cost. The FTC warns that a renewal may come on different terms, such as higher royalties (FTC consumer guide). Our franchise agreement terms report counts the other renewal conditions, such as remodeling and signing a general release.

Franchise transfer fee by sector and system size

Outside lodging, sector medians sit close together: $7,500 in automotive at the low end and $15,000 in senior care and entertainment at the high end, with most sectors at $10,000. Lodging stands apart at $70,000, because hotel brands charge their application or affiliation fee on a change of ownership. Each sector holds 17 to 27 FDDs, so small differences are not meaningful.

Broker and franchisor-found-buyer charges vary more: 72.2% of pet-service FDDs have one, against 14.8% in food and none in lodging. By system size, brands with fewer than 50 franchised outlets have the highest median transfer fee ($12,500, 30.0% of the initial fee); the 10 systems with 1,000 or more outlets have a median of $9,000.

Who pays, and what selling a franchise costs

Item 6 lists fees the franchisee pays, so most FDDs present the transfer fee as the seller’s bill: 139 of 253 name only the franchisee. 92 say the seller or the buyer may pay and 21 put it on the buyer, so 44.7% leave room for the buyer to carry it. The purchase agreement decides the split in practice.

Across the 244 brands with both a dollar fee and Item 20 transfer counts, the latest fiscal year’s 2,058 transfers imply about $25.0 million in transfer fees at the stated rates. That is a floor-based estimate, not money collected. Higher fees did not go with fewer transfers: the median transfer rate was 3.0% for brands charging under $10,000 and 3.1% for brands charging $10,000 or more. Our franchise resale index tracks how often resales are financed, and the franchise closure rates report reports transfer counts.

The transfer fee is one line in the cost of a sale. Sellers may also face a broker commission, the franchisor’s legal costs, required upgrades and the buyer’s training. Buyers should budget for the same items when comparing a resale with a new unit; see our guides to buying a franchise and franchise costs.

What the Franchise Rule and state laws say about transfer fees

The FTC Franchise Rule requires Item 6 to list, in a table, every other fee the franchisee pays the franchisor or its affiliates, with any formula used to compute it, and names transfers and renewals among the fee types (16 CFR 436.5(f), 2026 edition). Item 17 summarizes renewal requirements and the conditions for approving a transfer (16 CFR 436.5(q)). FTC staff note that a buyer who purchases directly from a franchisee, without significant franchisor involvement, is not entitled to the FDD (FTC Compliance Guide), so a buyer may need to ask for it.

A few states limit transfer charges. Iowa allows a reasonable transfer fee to reimburse the franchisor’s reasonable and actual expenses directly attributable to the transfer, for franchises operated in Iowa (Iowa Code 523H.5(3)(b); 523H.2; 537A.10(5)). California bars a franchisor from blocking a sale to a qualified buyer who meets the transfer conditions in the agreement (Cal. Bus. and Prof. Code 20028), and Minnesota treats unreasonable refusal of consent to a qualified transferee as an unfair practice (Minn. R. 2860.4400 H). None of these sets a dollar cap.

Seller checklist: reading the transfer and renewal rows in an FDD

1. Find the Transfer Fee row in Item 6 and note the structure: flat, a percentage of the then-current initial fee, a percentage of the price, or the greater of two measures.
2. Work out the fee at today’s initial fee and at your expected sale price; a greater-of formula takes the higher figure.
3. Check the notes and the agreement for ‘plus our costs’ and ‘plus any broker fees’.
4. Look for a resale assistance, lead or referral fee that applies if the franchisor supplies or already knows the buyer.
5. Check whether a move into your own company, a minority sale or a transfer on death is waived or reduced.
6. Find out what the buyer must pay for training and whether the buyer signs the current franchise agreement, which may carry different fees.
7. Agree in the purchase contract who pays each item.
8. For renewal, compare the renewal fee with the remodel and other conditions in Item 17.

Methods in brief

We reused the 259-brand Minnesota sample from our royalty-rates report. AI-assisted readers coded Item 6 and the related franchise agreement passages for every FDD under a written codebook; an independent second reading of 20 random brands agreed on 96.2% of 240 fields, and after checking each disagreement against the FDD the field error rate was 0.8%. Full methods are below.