Does the renewal agreement for Beauty Bungalows franchises include higher royalty fees?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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.
Source: Item 22 — CONTRACTS (FDD pages 47–48)
What This Means (2025 FDD)
According to Beauty Bungalows's 2025 Franchise Disclosure Document, the renewal agreement may include higher royalty and advertising fees. Specifically, the renewal franchise agreement will be in the then-current form for new franchisees, which may differ materially from the original agreement. This means that when a franchisee renews their agreement, the terms, including royalty and advertising fees, could be higher than what they were paying under the original agreement.
For a prospective Beauty Bungalows franchisee, this implies that the financial obligations could increase upon renewal. It is important to carefully review the then-current form of the franchise agreement for new franchisees at the time of renewal to understand the potential changes in fees. Franchisees should factor in the possibility of increased costs when making long-term financial projections for their business.
Additionally, prior to the expiration of the initial agreement, Beauty Bungalows requires franchisees to complete any renovations, upgrades, or modernizations to the franchise to the franchisor's satisfaction. The franchisor may also require the franchisee to execute a general release of all claims against Beauty Bungalows and its principals before executing the renewal franchise agreement. This release would cover all claims arising under any federal, state, or local law related to the agreement.