Where in the Closet Storage Concepts franchise agreement can I find details about breach and termination?
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.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2025 FDD)
According to Closet Storage Concepts' 2025 Franchise Disclosure Document, Section 8.2.2 and Section 9 outline the rights and duties upon termination of the franchise agreement. Specifically, Section 8.2.2(r) discusses the franchisor's right to terminate the agreement if the franchisee fails to comply with relocation requirements as detailed in Section 1.7 of the agreement.
Section 9.1 details the franchisee's obligations upon termination or expiration of the agreement, regardless of the cause. These obligations include ceasing operations, paying all outstanding fees, discontinuing the use of proprietary marks and software, returning the operations manual and confidential information, ceasing the use of telephone numbers associated with the franchise, surrendering materials containing proprietary marks, selling inventory bearing proprietary marks to the franchisor, assigning customer contracts to the franchisor, and ceasing to represent oneself as a Closet Storage Concepts franchisee.
These provisions are typical in franchise agreements to protect the franchisor's brand and ensure a smooth transition upon termination. A prospective franchisee should carefully review these sections to understand their responsibilities and the potential consequences of breaching the agreement, as well as the steps they must take when the franchise term ends.