Under what circumstances can the C3 Wellness Spa franchise agreement be modified, and what are the requirements for such modifications?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
| q. | Non-competition covenants during the term of the franchise | Not applicable | Not applicable as to Multi-Unit Development Agreement. However, each Spa Location Franchise developed pursuant to Multi-Unit Development Agreement will be subject to non-competition covenants set forth in each respective Franchise Agreement. |
|---|---|---|---|
| r. | Non-competition covenants after the franchise is terminated or expires | Not applicable | Not applicable as to Multi-Unit Development Agreement. However, each Spa Location Franchise developed pursuant to Multi-Unit Development Agreement will be subject to non-competition covenants set forth in each respective Franchise Agreement. |
| s. | Modification of the agreement | 5.4, 7.11 | Only by written agreement between you and us or if |
| governing law requires a modification. We can change | |||
| the form of the Franchise Agreement for future Spa | |||
| Location Franchises which will not alter your | |||
| obligations under the Multi-Unit Development | |||
| Agreement. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 43–50)
What This Means (2024 FDD)
According to C3 Wellness Spa's 2024 Franchise Disclosure Document, the franchise agreement can be modified under specific conditions and requirements. For a Multi-Unit Development Agreement, modifications can only occur through a written agreement signed by both C3 Wellness Spa and the franchisee, or if required by governing law.
C3 Wellness Spa retains the right to change the form of the Franchise Agreement for future Spa Location Franchises without altering the franchisee's obligations under the Multi-Unit Development Agreement. This means that while the core agreement for existing franchisees remains intact, the franchisor can update the agreement for new franchisees joining the system.
For agreements outside of the Multi-Unit Development Agreement, modifications require a written agreement signed by both the franchisee and C3 Wellness Spa. However, C3 Wellness Spa can unilaterally make changes to the manuals or reduce the scope of a restrictive covenant at its discretion. This allows C3 Wellness Spa some flexibility in adjusting operational guidelines and non-compete terms without requiring the franchisee's consent, potentially impacting how the franchisee operates their business or their ability to compete after the franchise term.