What is the duration of each additional term for the Baya Bar Successor Franchise Agreement?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
hereunder shall commence upon the Effective Date set forth above, and terminate on the date that is ten (10) years following the Opening Date, as defined in Section 8 hereof (the "Term").
- 5. SUCCESSOR OPTIONS. Subject to the terms and conditions of this Agreement, Franchisee shall have the right, following the expiration of the Term hereof, to enter into a new franchise agreement and other agreements then customarily employed by Franchisor
and in the form then generally being offered to prospective franchisees in the state in which the Territory is located (the "Successor Franchise Agreement") for two (2) additional terms of five (5) years. The term of each such Successor Franchise Agreement shall commence upon the date of expi
Source: Item 22 — CONTRACTS (FDD page 56)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, franchisees have the option to enter into a new franchise agreement after the initial term expires. Specifically, franchisees can sign a Successor Franchise Agreement for two additional terms, each lasting five years. These successor terms begin immediately after the expiration of the preceding term.
To exercise this option, a franchisee must meet several conditions. They must not have committed three or more uncured defaults during the current term, complete any required additional training to Baya Bar's satisfaction, secure the right to continue occupying the premises or obtain approval for a new location, execute a general release of claims against Baya Bar, and perform any required remodeling or redecoration to meet current standards. Additionally, the franchisee must pay a successor agreement fee of $3,500 per term and sign the Successor Franchise Agreement.
This renewal structure provides franchisees with the opportunity to extend their business operations, contingent upon meeting Baya Bar's standards and requirements. The five-year term for each renewal is fairly standard in the franchise industry, offering a balance between long-term security and the franchisor's need to update agreements periodically. The $3,500 successor agreement fee is relatively low compared to the initial franchise fee, making it an accessible cost for renewal.