Does a Bevaris Alliance franchisee have to pay an initial fee upon renewal?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
- 3.2 Renewed Term. The Franchisee may, by notice in writing to the Franchisor, given not less than 6 months before and not more than 8 months before the end of the Initial Term, request the term of this agreement to be renewed for a period of 5 years after the end of the Initial Term. The Franchisor shall, by notice in writing to the Franchisee, given not less than 4 months before the end of the Initial Term, accept a renewal of the term of this agreement, if:
- (a) the Franchisee has paid or will pay on or before entering into the successor franchise agreement (in accordance with clause 4) a Renewal Fee of ten percent (10%) the Franchisor's then current Initial Fee;
- (b) at the end of the Initial Term, there are no outstanding material breaches by the Franchisee or the Individual of this agreement, and there are no grounds on which the Franchisor has a right to terminate this agreement under clause 18;
Source: Item 23 — RECEIPT (FDD pages 22–88)
What This Means (2024 FDD)
According to the 2024 Bevaris Alliance Franchise Disclosure Document, a franchisee must pay a renewal fee if they choose to renew their franchise agreement. The initial term of the franchise agreement is 5 years. To renew the agreement for an additional 5-year term, the franchisee must provide written notice to Bevaris Alliance between 6 and 8 months before the end of the initial term.
The renewal is contingent upon the franchisee paying a Renewal Fee equal to ten percent (10%) of Bevaris Alliance's then-current Initial Fee. Additionally, at the end of the initial term, the franchisee must not have any outstanding material breaches of the agreement, and there must be no grounds for Bevaris Alliance to terminate the agreement.
In the franchise industry, it is common for franchisors to charge a renewal fee, often a percentage of the initial franchise fee, to cover administrative costs and ensure the franchisee's continued commitment to the brand. The specific terms and conditions for renewal, including the fee amount and any other requirements, are typically outlined in the franchise agreement.