How many renewal periods are offered to a Closet Storage Concepts franchisee?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
ubject 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.
2.4 Conditions for Renewal Option.Franchisee shall have the right to exercise the renewal option referred to in Section 2.2 above provided that all of the following conditions have been satisfied:
2.4.1 Franchisee shall repair or replace, at Franchisee's cost and expense, equipment (including electronic cash register or computer hardware or software systems), signs, interior and exterior decor items, fixtures, or furnishings, supplies and other products and materials required for the operation of the Closet & Storage Concepts business as Franchisor may reasonably require and shall obtain, at Franchisee's cost and expense, any new or additional equipment, fixtures, supplies and other products and materials which may be reasonably required by Franchisor for Franchisee to offer and sell new products and services from the Closet & Storage Concepts business and shall otherwise modernize the business' premises, equipment (including electronic cash register or computer hardware and software systems), signs, interior and exterior decor items, fixtures, furnishings and supplies and other products and materials required for the operation of the Closet & Storage Concepts business as reasonably required by Franchisor to reflect the then current standards and image of the System as contained in the Operations Manual or otherwise provided in writing by Franchisor; and
2.4.2. Franchisee shall present satisfactory evidence that Franchisee has the right to remain in possession of the premises at the Approved Location or obtain Franchisor's approval of a new site for the operation of the Approved Location for the duration of the renewal term of this Agreement.
2.4.3 Franchisee has executed a release of any and all claims against Franchisor and its parents, affiliates, and their equity owners, officers, directors, agents, employees, attorneys and accountants arising out of or related to this Agreement or any related agreement. The release shall contain language and be of the form chosen by Franchisor, except the release shall not release any liability specifically provided for by any applicable state statute regulating franchising. Our current form of release is attached to this Agreement as Exhibit "5".
2.4.4 All amounts to be paid by Franchisee to Franchisor and/or its affiliates are currently paid, and no default under this Agreement exists uncured five (5) days after the Franchisee has received written notice of any overdue amounts. Even if no such default exists, Franchisor may revoke said option and refuse to allow said renewal if, during the initial term of this Agreement, Franchisee has been in material default of this Agreement. Franchisor and Franchisee agree that, for the purposes of this Section, such material default includes, but is not limited to, failure to make one hundred percent (100%) of all payments and submit reports within fifteen (15) days of the date they are actually due. It is further agreed that such default also includes Franchisee's consistently demonstrated unwillingness to take remedial actions as recommended by Franchisor to improve Franchisee's sales and marketing methods, in accordance with Franchisee's obligations under this Agreement
2.4.5 As part of the process of renewing this Agreement, Franchisor reserves the right to re-evaluate the then-existing Territory according to certain demographics and Franchisor's then-current standards. A re-evaluation of the Territory may result in the renewal Territory being smaller or larger than the original Territory.
2.5 Franchisee Right of First Refusal.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2025 FDD)
The 2025 Franchise Disclosure Document does not explicitly state the number of renewal periods offered to a Closet Storage Concepts franchisee. However, Section 2.4 outlines the 'Conditions for Renewal Option,' indicating that a renewal option exists. The document details several conditions that a franchisee must meet to exercise this renewal option, such as modernizing the business to reflect current standards, providing evidence of the right to remain in possession of the premises, executing a release of claims against the franchisor, and ensuring all payments to the franchisor are current.
Additionally, the FDD specifies circumstances under which the franchisor may elect not to renew the franchise agreement. Section 2.6 discusses 'Franchisor's Election Not to Renew,' stating that the franchisor must provide the franchisee with a Notice of Probable Intention Not to Renew at least nine months prior to the expiration of the agreement, detailing the reasons for non-renewal. A Notice of Refusal to Renew must be sent at least six months prior to expiration if the franchisor believes the franchisee cannot fulfill their obligations.
While the FDD provides information on the conditions for renewal and the franchisor's right not to renew, it does not specify the length of the renewal term or how many renewal periods are possible. A prospective franchisee should clarify the number of available renewal periods and the duration of each term with the franchisor to fully understand the long-term potential and conditions of the franchise agreement.