Does the Beauty Bungalows franchise agreement require a renewal provision?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
enew Franchisee's license due to a condition as set forth in Sections 3.03(a), (b), (c) or (d), then Franchisor must give Franchisee a notice of non-renewal prior to the expiration of this Agreement.
- 3.05 Renewal Agreement. Prior to the expiration of this Agreement, Franchisee must execute a renewal franchise agreement and all other legal agreements in Franchisor's then-current form for new franchisees. These agreements may vary in material aspects from this Agreement, including, but not limited to, higher royalty and advertising fees. Franchisee, prior to the expiration of this Agreement, must complete, to the satisfaction of Franchisor, those renovations, upgrades and/or modernizations of the Franchise as set forth in the Manual or as reasonably required by the Franchisor. Prior to executing a renewal franchise agreement, Franchisor, in its sole discretion, may require Franchisee to execute a general release of all claims Franchisee may have against Franchisor and all principals of Franchisor. This release shall include all claims arising under any federal, state, or local law, rule, or ordinance arising out of or concerning this Agreement (to the fullest extent permitted by law) and shall be in a form satisfactory to Franchisor. If Franchisee fails to execute a renewal franchise agreement prior to the expiration of this Agreement and Franchisor fails to give Franchisor a notice of non-renewal pursuant to Section 3.04 above, then this Agreement will automatically be extended from month-to-month until a renewal franchise agreement is executed or until Franchisor delivers a notice of non-renewal pursuant to Section 3.04 above.
- 3.06 Renewal Fee. Upon signing a renewal franchise agreement,
Source: Item 22 — CONTRACTS (FDD pages 47–48)
What This Means (2025 FDD)
According to Beauty Bungalows's 2025 Franchise Disclosure Document, the franchise agreement includes a renewal provision. Prior to the expiration of the existing agreement, a franchisee must execute a renewal franchise agreement, along with any other legal agreements that Beauty Bungalows requires for new franchisees at that time. These new agreements may differ significantly from the original agreement, potentially including higher royalty and advertising fees.
As part of the renewal process, Beauty Bungalows may require franchisees to complete renovations, upgrades, or modernizations to the franchise location to the franchisor's satisfaction. Additionally, Beauty Bungalows may, at its discretion, require franchisees to sign a general release of all claims against the franchisor and its principals before executing the renewal agreement. This release would cover all claims arising from federal, state, or local laws related to the franchise agreement.
If a franchisee fails to execute a renewal agreement before the expiration of the current agreement, and Beauty Bungalows does not provide a notice of non-renewal, the agreement will automatically extend on a month-to-month basis. To officially renew, the franchisee must pay a renewal fee. This fee is the greater of 15% of the then-current initial franchise fee or $7,500. This means that franchisees need to be prepared for potential capital expenditures for renovations and potentially higher fees upon renewal.