Under what conditions can a Chocolate Fish Coffee franchisee enter into a successor agreement?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
- 3.1 Term. This Agreement commences on the Effective Date and continues for 10 years.
- 3.2 Successor Agreement. When the term of this Agreement expires, Franchisee may enter into an unlimited number of successor agreements subject to the following conditions prior to each expiration:
- (i) Franchisee notifies Chocolate Fish Franchising of the election to renew between 90 and 180 days prior to the end of the term;
- (ii) Franchisee (and its affiliates) are in compliance with this Agreement and all other agreements with Chocolate Fish Franchising (or any of its affiliates) at the time of election and at the time of renewal;
- (iii) Franchisee has made or agrees to make (within a period of time acceptable to Chocolate Fish Franchising) renovations and changes to the Business as Chocolate Fish Franchising requires (including a Remodel, if applicable) to conform to the then-current System Standards;
- (iv) Franchisee and its Owners execute Chocolate Fish Franchising's then-current standard form of franchise agreement and related documents (including personal guaranty), which may be materially different than this form (including, without limitation, higher and/or different fees), except that Franchisee will not pay another initial franchise fee and will not receive more renewal or successor terms than described in this Section;
- (v) Franchisee and each Owner executes a general release (on Chocolate Fish Franchising's then-standard form) of any and all claims against Chocolate Fish Franchising, its affiliates, and their respective owners, officers, directors, agents and employees.
Source: Item 23 — RECEIPTS (FDD pages 41–119)
What This Means (2024 FDD)
According to the 2024 Chocolate Fish Coffee Franchise Disclosure Document, a franchisee may enter into an unlimited number of successor agreements when their initial 10-year term expires, provided they meet certain conditions.
The franchisee must notify Chocolate Fish Coffee of their election to renew the agreement between 90 and 180 days before the end of the current term. At both the time of election and the time of renewal, the franchisee and its affiliates must be in full compliance with the existing franchise agreement and any other agreements with Chocolate Fish Coffee or its affiliates.
Additionally, the franchisee must complete any required renovations or changes to the Chocolate Fish Coffee business to meet the then-current system standards, within a timeframe acceptable to Chocolate Fish Coffee. The franchisee and each owner must also execute Chocolate Fish Coffee's current standard franchise agreement and related documents, including a personal guaranty, which may have materially different terms and fees, although the franchisee will not have to pay another initial franchise fee. Finally, the franchisee and each owner must sign a general release of all claims against Chocolate Fish Coffee and its affiliates.