What upgrades are required at the end of the initial term for a Buff City Soap franchise?
Buff_City_Soap Franchise · 2025 FDDAnswer from 2025 FDD Document
| w. | Choice of law | 26(b) | Texas law applies (subject to state law). Your local law may supersede this provision. See the Disclosure Document Addenda for Certain States at Exhibit E. |
Development Agreement
The following table lists certain important provisions of the Development Agreement. You should read these provisions in that agreement attached as Exhibit B to this Disclosure Document.
| Provision | Section in Development Agreement | Summary | |
|---|---|---|---|
| a. | Length of the franchise term | 3(a) and Exhibit A | The Development Term expires on the earlier of the expiration date stated in the Summary Page of the Development Agreement or the date on which you open the required cumulative number of Makeries in the Territory. |
| b. | Renewal or extension | N/A | You may not renew the Development Agreement. |
| of the term | |||
| c. | Requirements for you | N/A | Not Applicable. |
| to renew or extend | |||
| Provision | Section | Summary | |
| in | |||
| Development | |||
| Agreement | |||
| ---- | --------------------------------------------------------- | ------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| d. | Termination by you | N/A | You |
| may terminate under any grounds permitted by | |||
| applicable | |||
| law. | |||
| e. | Termination | N/A | Not Applicable. |
| by | |||
| us | |||
| Without cause | |||
| f. | Termination by us with cause | 12 | We may terminate your Development Agreement only if you default or fail to comply with your obligations under the Development Agreement or if a Franchise Agreement between us and you or your affiliate is terminated. |
| g. | "Cause" defined - curable defaults | 12(a) | Curable defaults include 30 days to cure failure to comply with the Development Schedule during any Development Period; five days to cure any failure to make payments owed to us; and 30 days for failure to comply with any other material provision of the Development Agreement (other than the defaults listed in Paragraph 17.h. below). |
| h. | "Cause" defined - non curable defaults | 12(a), 12(b), 12(c) and 12(d) | Except as prohibited under state law, non-curable defaults include bankruptcy or insolvency (our right to terminate may not be enforceable under bankruptcy law); material misrepresentation or omission by you or your principals or affiliates that negatively affect us; you or your principals or affiliates being held liable or convicted of a felony, indictable offense or other unlawful act or you or your principals or affiliates engaging in any dishonest or unethical conduct or act that may materially or adversely affect the Brand, the System or goodwill associated with the Marks; any unauthorized transfer pursuant to Section 11 by you or any of your principals or affiliates; any unauthorized disclosure or use of our Confidential Information, the Manuals, the Marks; or our Trade Secrets; any failure by you, your principals or your Designated Principal to comply with the representations, warranties and covenants in the Development Agreement; termination by us of any Franchise Agreement with you or any of your affiliates; failure to pay any taxes applicable to the operation of your business under the Development Agreement, absent a good faith dispute; three or more defaults within 12-month period, regardless of whether corrected after notice of such failure; and failure to comply with applicable law. |
| i. | Your obligations on termination/non renewal | 13 | Obligations include ceasing development of BCS Makeries; payment of all amounts owed to us (including without limitation a lump sum payment of liquidated damages, described in Item 6); |
Source: Item 16 — Restrictions on What the Franchisee May Sell (FDD pages 49–59)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the Development Agreement with Buff City Soap cannot be renewed or extended. The table provided outlines various provisions within the Development Agreement, including the length of the franchise term, conditions for termination by either party, and obligations upon termination or non-renewal. However, it explicitly states that renewal or extension of the Development Agreement is not an option for Buff City Soap franchisees.
Upon termination or non-renewal, franchisees have specific obligations. These include ceasing development of Buff City Soap Makeries, paying all outstanding amounts owed to Buff City Soap (potentially including liquidated damages), discontinuing the use of all Marks, ceasing the use of the System and confidential information, and returning copies of the Manuals and all other proprietary or confidential materials. These obligations apply except for Makeries operated under a continuing Franchise Agreement. Franchisees must also comply with post-termination covenants and obligations, such as those related to confidentiality, competition, and indemnification.
Because the Development Agreement cannot be renewed, there are no required upgrades at the end of the initial term. Instead, the franchisee must cease operations under the Development Agreement unless they have a continuing Franchise Agreement in place. This means a Buff City Soap franchisee should carefully consider the initial term and the potential need to negotiate a new agreement rather than assuming an automatic renewal with upgrade requirements, which is a common practice in many other franchise systems.