What is the standard 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 a new franchisee can expect to operate their Bor Restoration franchise for a decade, assuming they comply with the terms of the franchise agreement.
Bor Restoration offers the possibility of extending the franchise term. A franchisee can renew for two additional terms of five years each, potentially extending the franchise agreement by another ten years.
However, to qualify for these renewal terms, the franchisee must meet specific conditions. These include providing notice of renewal, having no outstanding material defaults or money owed to Bor Restoration, and not having received more than three default notices during the initial term or one during any Successor Franchise Term. Additionally, Bor Restoration must not have determined, in its Reasonable Business Judgment, not to renew the agreement. The franchisee must also sign the then-current Franchise Agreement, which may contain terms that differ materially from the original agreement, and pay the renewal fee. These conditions are fairly standard in franchising, as franchisors want to ensure that franchisees are in good standing before extending the relationship.