What is the length of each renewal or extension 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 franchise agreement allows for two additional renewal terms, each lasting 5 years, provided the franchisee meets all obligations for Successor Franchise Rights. This means that after the initial 10-year term, a franchisee in good standing has the option to extend their franchise agreement for up to another 10 years, divided into two separate 5-year periods.
To be eligible for these renewal terms, the franchisee must fulfill several requirements. They must provide notice of their intent to renew, have no outstanding material defaults or money owed to Bor Restoration, and must not have received more than three default notices during the initial term or one during the Successor Franchise Term. Additionally, Bor Restoration must not have determined, in their Reasonable Business Judgment, not to renew the agreement.
Furthermore, the franchisee is required to sign the then-current Franchise Agreement, which may contain terms that are materially different from the original agreement. They must also pay the renewal fee. This condition is fairly standard in franchising, as franchisors typically update their franchise agreements over time to reflect changes in the market, legal requirements, and the overall business model.
Prospective franchisees should carefully consider these renewal conditions and understand that the terms of the renewed agreement may not be identical to those of the initial agreement. It is important to discuss potential changes and renewal fees with Bor Restoration before committing to the initial franchise term to fully understand the long-term obligations and costs associated with the franchise.