How does the 1 800 Packouts franchise agreement define the process for 'Grant and Renewal of Franchise'?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
1. GRANT AND RENEWAL OF FRANCHISE
A. GRANT OF FRANCHISE
Subject to the provisions of this Agreement, we hereby grant to you a non-exclusive license (the “License”) to own and operate a Franchised Business in the territory specified in Appendix A (“Your
Territory”) and to use the Marks and the System in the operation of the Franchised Business. Termination or expiration of this Agreement will constitute termination or expiration of the License.
2. TERM
A. INITIAL TERM
The initial term of the License (the “Initial Term”) shall begin on the Agreement Date and expire on the 10th anniversary of the Agreement Date.
B. RENEWAL OF FRANCHISE
You may, at your option, renew the License for an additional 10-year term (the “Renewal Term,” and collectively, with the Initial Term, the “Term”), provided that:
- (1) You have given us written notice of an election to renew not less than 60 days months nor more than 6 months prior to the end of the initial term and any renewal term of this Agreement;
- (2) You are not at such time in material breach of any of your obligations under this Agreement or any other agreement with us;
- (3) You have substantially complied on a timely basis with all of the conditions and requirements of this Agreement and any other agreements with us or our affiliates throughout the terms of such agreements; and
- (4) Subject to applicable law, you and your Owners execute a general release, in a form prescribed by us, of any claims against us and our affiliates, and our and their officers, directors, agents and employees.
Each renewal will be effectuated by execution of our then-current form of franchise agreement, and all other agreements, instruments and documents then customarily used by us in granting franchises for Franchised Businesses, the terms of which may differ from this Agreement. In such renewal franchise agreement, you will not receive the right to enter into an additional renewal term. A renewal fee in the amount of $10,000 will be payable upon renewal of the License.
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to the 2025 1 800 Packouts Franchise Disclosure Document, the franchise agreement details the grant and renewal terms for the franchise license. 1 800 Packouts grants the franchisee a non-exclusive license to operate a business within a specified territory, using their marks and system. This license is tied to the franchise agreement, meaning its termination or expiration leads to the termination or expiration of the license. The initial term for the 1 800 Packouts license is 10 years from the agreement date.
For renewal of the 1 800 Packouts franchise, the franchisee has the option to renew for an additional 10-year term. To do so, the franchisee must provide written notice of their intent to renew between 6 and 60 months before the end of the current term. They must also be in compliance with all obligations under the franchise agreement and any other agreements with 1 800 Packouts. Furthermore, franchisees must have substantially complied with all requirements of their agreements with 1 800 Packouts and its affiliates. Franchisees (and their Owners) will also need to execute a general release of claims against 1 800 Packouts and its affiliates, subject to applicable law.
Each renewal of a 1 800 Packouts franchise is executed using the then-current form of the franchise agreement, which may have terms that differ from the original agreement. The franchisee will not receive the right to enter into an additional renewal term in such renewal franchise agreement. A renewal fee of $10,000 is payable upon renewal of the license. Prospective franchisees should note the importance of understanding the terms of the renewal agreement, as these may differ from the original agreement and impact their future operations and obligations.