Where are Additional Territories quantified in the Casiola agreement for the purpose of calculating the Initial Franchise Fee?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
ing Market designated and set forth in Schedule 1 of this Agreement (the "Operating Market"). If Schedule 1 does not specifically identify and designate an Operating Market, and/or if Schedule 1 is not signed by Franchisor, the Operating Market shall be determined by Franchisor in Franchisor's Reasonable Business Judgment;
- (2) The Operating Marketshall be comprised of a Territory and if, at the time of signing this Agreement, Franchisor and Franchisee agree to supplement the size of Franchisee's Operating Market by adding an Additional Territory or Additional Territories, the Additional Territory or Additional Territories shall be included within the Operating Market identified in Schedule 1 and shall be quantified in Schedule 2 for purposes of calculating the Initial Franchise Fee and other obligations under this Agreement;
- (3) Franchisee's Administrative Office and Administrative Office location must meet Franchisor's standards and specifications and be approved by Franchisor;
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to Casiola's 2024 Franchise Disclosure Document, the quantification of Additional Territories for calculating the Initial Franchise Fee is found in Schedule 2 of the Franchise Agreement. Specifically, if a franchisee and Casiola agree to expand the Operating Market by adding Additional Territories, these territories are included within the Operating Market identified in Schedule 1. Schedule 2 then quantifies these Additional Territories to determine the Initial Franchise Fee and other obligations under the agreement.
Schedule 1 of the Franchise Agreement designates the Operating Market, which is the area where the franchisee is authorized to operate a Casiola Business. If Schedule 1 does not specify the Operating Market or is not signed by Casiola, the Operating Market will be determined by Casiola based on their reasonable business judgment. The Operating Market consists of a Territory, and any Additional Territories agreed upon.
Schedule 2, titled "Franchise Fee Acknowledgment," is where the agreement specifies whether the Operating Market consists of a single territory or includes additional territories. The schedule includes a section to indicate the number of total territories and the corresponding Initial Franchise Fee in dollars. This schedule must be completed and acknowledged by both Casiola and the franchisee as of the effective date of the Franchise Agreement.