What are considered 'Operating Assets' for a Beauty Bungalows franchise?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
3.2. Damaged Operating Assets.
If the property, equipment, and/or vehicles ("Operating Assets") used in the operation of any Franchised Business in your Development Schedule are destroyed or damaged by any cause beyond your control such that they may no longer continue to be utilized for the operation of a particular Franchised Business, you must immediately give us notice of such destruction or damage ("Destruction Event"). You must diligently work to repair and replace the Operating Assets of your Franchised Business as soon as possible to resume operation of your Franchised Business. If a Franchised Business is closed due to a Destruction Event, the Franchised Business will continue to be deemed "in operation" for the purpose of this Agreement for up to 90 days after the Destruction Event occurs. If a Franchised Business (i) is closed in a manner other than those described in this Section 3.2 or as otherwise agreed by us in writing or (ii) fails to reopen within 90 days after a Destruction Event, then we may exercise our rights under Section 6.2 (Our Remedies). In the event the Operating Assets are completely destroyed or otherwise incapable of being repaired following a Destruction Event, we will not exercise the remedies set forth under Section 6.2 provided, that (a) within the 30 days after the Destruction Event you have made arrangements with us or our designated supplier to obtain new Operating Assets for use in your Franchised Business; and (b) you are open and operating your Franchised Business in the protected territory within ninety (90) days of the Destruction Event.
Source: Item 23 — RECEIPTS (FDD pages 48–177)
What This Means (2025 FDD)
According to Beauty Bungalows' 2025 Franchise Disclosure Document, Operating Assets are defined as the property, equipment, and/or vehicles used in the operation of any Franchised Business. This definition is important in the context of potential damage or destruction to these assets.
If these Operating Assets are damaged or destroyed due to circumstances beyond the franchisee's control, the franchisee must promptly notify Beauty Bungalows of the event. The franchisee is then expected to diligently repair or replace the assets to resume business operations as quickly as possible.
For up to 90 days following a Destruction Event, the Franchised Business will still be considered "in operation" under the terms of the Area Development Agreement. However, if the business remains closed beyond this 90-day period, or if the closure is due to reasons other than the Destruction Event, Beauty Bungalows may exercise its rights and remedies as outlined in Section 6.2 of the agreement. If the Operating Assets are completely destroyed and cannot be repaired, Beauty Bungalows will not pursue those remedies, provided that the franchisee arranges for new Operating Assets within 30 days of the Destruction Event and reopens the Franchised Business within 90 days.