For Amorino franchises, what is the initial franchise term length for retail stores?
Amorino Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company generally derives its revenues through conventional franchise arrangements that provide for payment of an initial fee. Under the franchise agreement, franchisees are granted certain rights and certain services will be provided. Franchisees have the right to operate a store or outlet using Amorino's trademarks, branding, and systems. Franchisees are also provided training and initial startup support under the agreement. In accordance with the guidance of ASC-952 "Franchisors", the Company has made an accounting policy election to account for all of the above services provided and rights granted as a single performance obligation. Initial fees are recognized as the Company satisfies the performance obligation over the franchise term, which is generally ten years for retail stores and five years for mobile outlets.
Source: Item 22 — CONTRACTS (FDD pages 80–81)
What This Means (2025 FDD)
According to Amorino's 2025 Franchise Disclosure Document, the initial term for a retail store franchise agreement is generally ten years. This term begins on the effective date and expires on the scheduled expiration date, regardless of when the store actually opens for business. The specific expiration date is outlined in the Data Sheet of the franchise agreement.
Amorino franchisees have the option to renew their franchise agreement for two additional five-year terms, provided they meet certain conditions. These conditions include giving Amorino written notice of their intent to renew at least three months (but no more than six months) before the current term expires, not being in default of the agreement, completing any required training and store renovations, and signing a general release.
Additionally, franchisees must pay a renewal fee equal to 25% of Amorino's then-current initial franchise fee for each five-year renewal term and sign an amendment to the franchise agreement to reflect any new terms. This means that renewing the franchise will incur additional costs and may involve accepting new terms that could be materially different from the original agreement. Prospective franchisees should carefully consider these factors when evaluating the long-term potential of an Amorino franchise.