How can the Closet Storage Concepts agreement be modified?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
hisor's proposal of a location does not constitute Franchisor's representation or guarantee that Franchisee shall succeed at the selected location, nor an expression of Franchisor's opinion regarding the viability of the location.
- 1.7 Acceptance of Relocation. If, within thirty (30) days after receipt of Franchisor's proposal of a new location, Franchisee gives to Franchisor written notice of acceptance of such proposal, and either enters into such tendered lease, sublease, or sale contract, or if none is tendered, agrees in writing to comply with any and all requirements prescribed by Franchisor relating to the lease of the Closet & Storage Concepts business premises and construction or alteration of improvements on the premises, then notwithstanding the termination right at Section 8.2.2 (r) of this Agreement, this Agreement shall continue for the remainder of the term and shall be deemed amended to refer to such new location. If Franchisee fails to comply with the provisions of this Section 1.7 within said thirty (30) day period, then Franchisor shall have the right to terminate this Agreement pursuant to Section 8.2.2 (r), and Franchisee shall have no further rights under or by virtue of Sections 1.6 through 1.7 of this Article.
- 1.8 Other Channels of Distribution. Franchisor and Franchisor's affiliates, reserve the unrestricted right to offer products and services, whether now existing or developed in the future, identified by the Proprietary Marks or other marks Franchisor and/or Franchisor's affiliates own or license, through any distribution method Franchisor or its affiliates may establish, and may franchise or license others to do so, both within and outside the Territory, regardless of whether the offering of products or services in the other channels of distribution compete with Franchisee's Closet & Storage Concepts business. These other channels of distribution may include locations and venues other than a Closet & Storage Concepts location, other retail establishments, mail order, catalogs, the Internet, and any similar outlets or distribution methods as Franchisor and/or its affiliates determine, in Franchisor's or its affiliate's sole discretion. This Agreement does not grant Franchisee any rights to distribute products through other channels of distribution as described in this Section 1.8, and Franchisee has no right to share, nor does Franchisee expect to share, in any of the proceeds Franchisor and/or Franchisor's affiliates or franchisees or licensees or any other party receives in connection with the alternate channels of distribution.
2. TERM AND RENEWAL
- 2.1 Term. This Agreement grants rights to Franchisee for a period of 10 years and is effective when signed by Franchisor.
- 2.1.1 Renewal Option.Subject to the provisions of this Article 2, Franchisee is hereby granted an option to extend this Agreement for one (1) successive ten (10) year period (hereinafter referred to as the "Renewal Period"). This option may be exercised by Franchisee by giving written notice of its election to renew the franchise not less than 6 months nor more than 12 months prior to the expiration of the current term. Upon payment of the renewal fee set forth in Section 2.2 below and compliance with all other conditions for exercise of the renewal option set forth in Section 2.5 of this Agreement at least five (5) days prior to the expiration date, Franchisee shall be permitted to renew this Agreement for an additional
ten (10) years (the date of such renewal shall be hereinafter referred to as the "Renewal Date"). Franchisee may be required to execute Franchisor's then-current form of Franchise Agreement.
- 2.2 Renewal Fee.The renewal fee shall be the sum of 25% of the then current Initial Franchise Fee, subject to a minimum of $12,375.
- 2.3 Royalties after Renewal.Upon renewal, the royalties payable to Franchisor shall be the same as the royalties provided in the standard franchise agreements being used by Franchisor as of the Renewal Date.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2025 FDD)
According to the 2025 Closet Storage Concepts Franchise Disclosure Document, the franchise agreement can be modified in a few specific ways. If Closet Storage Concepts proposes a new location for the franchise, the franchisee has 30 days to accept the proposal in writing. By agreeing to the new location, the franchise agreement is then amended to reflect the new location for the remainder of the franchise term. If the franchisee does not accept the new location within the 30-day period, Closet Storage Concepts has the right to terminate the agreement.
Additionally, the standards and specifications applicable to the operation of the franchised Closet Storage Concepts business can be changed. These changes, including those for products, services, computer software, inventory, supplies, signs, fixtures, furnishings, technology, and equipment, can be implemented through written notice or changes to the Operations Manual. Closet Storage Concepts also has the right to eliminate or introduce products or services, or change existing ones, with the franchisee required to cease offering discontinued products immediately and revise changed products or services accordingly. Franchisees must start offering and selling any new products and services within 15 days of notification from Closet Storage Concepts.
Furthermore, the Closet Storage Concepts agreement can be modified during the renewal process. To exercise the renewal option, a franchisee must repair or replace equipment, signs, decor items, fixtures, furnishings, supplies, and other materials as reasonably required by Closet Storage Concepts. Franchisees must also obtain any new or additional equipment, fixtures, supplies, and materials needed to offer new products and services. The franchisee must modernize the business premises to reflect the then-current standards and image of the Closet Storage Concepts system. The franchisee must also provide evidence that they can remain in possession of the premises or obtain approval for a new site. Finally, the franchisee must execute a release of claims against Closet Storage Concepts.