What is the length of the initial franchise term for a Bor Restoration franchise?
Bor_Restoration Franchise · 2024 FDDAnswer from 2024 FDD Document
| PROVISION | SECTION IN FRANCHISE AGREEMENT | SUMMARY |
|---|---|---|
| a. Length of the franchise term | 4 | Ten years unless terminated sooner. |
| b. Renewal or extension of the term | 4 | Two additional 5-year terms if all obligations for Successor Franchise Rights are met. |
| c. Requirements for franchisee to renew or extend | 4 | You must provide notice, you must have no outstanding material defaults or money owed, you must not have had more than three default notices during the initial term or one notice during the Successor Franchise Term, we must not have determined in our Reasonable Business Judgment not to renew, you must sign the then-current Franchise Agreement (which may have terms materially different than those of your current Franchise Agreement) and pay the renewal fee. |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 33–35)
What This Means (2024 FDD)
According to Bor Restoration's 2024 Franchise Disclosure Document, the initial franchise term is ten years, unless the agreement is terminated sooner. This means that a new franchisee can expect to operate their Bor Restoration franchise for a decade before needing to renew the agreement.
Bor Restoration offers the possibility of extending the franchise term with two additional 5-year terms, providing an opportunity for long-term business operation. However, these extensions are not automatic. To be eligible for these successor franchise rights, the franchisee must meet certain obligations.
The franchisee must provide notice of their intent to renew and have no outstanding material defaults or money owed to Bor Restoration. Furthermore, they cannot have received more than three default notices during the initial ten-year term or one notice during any subsequent Successor Franchise Term. Bor Restoration must also not have determined, in its Reasonable Business Judgment, not to renew the agreement. Finally, the franchisee must sign the then-current Franchise Agreement, which may contain terms that are materially different from the original agreement, and pay the renewal fee.
These conditions for renewal are fairly standard in the franchise industry, as franchisors typically want to ensure that franchisees are in good standing and compliant with the system before granting additional terms. Prospective Bor Restoration franchisees should carefully consider these requirements and ensure they are prepared to meet them to secure the possibility of extending their franchise term beyond the initial ten years.