How many renewal terms are franchisees of Beauty Bungalows allowed?
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, franchisees must execute a renewal franchise agreement prior to the expiration of their current agreement to continue operating. The renewal agreement will be in the current form that Beauty Bungalows uses for new franchisees, and it may have materially different terms than the original agreement. These differences can include higher royalty and advertising fees, which could impact the franchisee's profitability.
To renew their franchise agreement, Beauty Bungalows may require franchisees to complete renovations, upgrades, or modernizations to the franchise location as specified in the manual or as reasonably required by Beauty Bungalows. Additionally, Beauty Bungalows may require franchisees to execute a general release of all claims against Beauty Bungalows and its principals before executing the renewal agreement. This release would cover all claims arising under any federal, state, or local law related to the franchise agreement, to the fullest extent permitted by law.
If a franchisee fails to execute a renewal franchise 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. This extension continues until a renewal agreement is executed or until Beauty Bungalows delivers a notice of non-renewal. Upon signing a renewal franchise agreement, the franchisee will not be required to pay another initial franchise fee. However, they must pay a renewal fee equal to 15% of Beauty Bungalows' then-current initial franchise fee or $7,500, whichever is greater.