Does the FDD require Bombs Away to include a renewal provision in its franchise agreement?

According to the 2024 Bombs Away Franchise Disclosure Document, the franchise agreement is not required to have a renewal provision. However, Item 23 discusses provisions that would be considered unfair or unjust in franchise agreements, particularly concerning renewal and termination.

Specifically, the FDD mentions that a franchisor cannot refuse to renew a franchise without fairly compensating the franchisee for the fair market value of their inventory, supplies, equipment, fixtures, and furnishings at the time of expiration. This requirement applies if the franchise term is less than 5 years and the franchisee is restricted from operating a similar business in the same area after the franchise expires, or if the franchisee does not receive at least 6 months' notice of the franchisor's intent not to renew.

This section aims to protect franchisees from unfair practices related to non-renewal, ensuring they receive compensation for their assets under specific conditions. However, it's important to note that this does not mandate a renewal provision itself, but rather sets conditions for fair compensation if renewal is denied under certain circumstances. Bombs Away franchisees should carefully review Item 17 of the FDD, which covers renewal, termination, transfer, and dispute resolution, to fully understand their rights and obligations.