Can a Coffee News franchisee request the Franchisor to extend the term of the Franchise Agreement?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee agrees not to pledge or encumber this Agreement except with the express written approval of Franchisor, to be granted in the Franchisor's sole discretion, which Franchisee may request in the event that Franchisee seeks to sell the Franchise granted hereunder to a third party who desires to use said Franchise as collateral for purchase financing.
Franchisor shall have the authority to extend the term of this Agreement beyond the term set forth in paragraph 3 to enable a purchaser of the Franchise to obtain financing of said purchase if Franchisor, in his sole discretion, determines such extension to be necessary.
Franchisee may request approval of the use of the Franchise granted hereunder as collateral and/or the extension of the term of this Agreement by written request sent to address provided under paragraph 14.
Source: Item 23 — Receipts (FDD pages 36–118)
What This Means (2025 FDD)
According to the 2025 Coffee News Franchise Disclosure Document, a franchisee can request an extension to the term of their Franchise Agreement under specific circumstances. The franchisee may request the franchisor's approval to use the franchise as collateral or to extend the agreement's term by submitting a written request to the address provided in paragraph 14 of the agreement.
The franchisor has the authority to extend the term of the agreement beyond its original term, as outlined in paragraph 3, if it is deemed necessary to enable a purchaser of the franchise to obtain financing for the purchase. This decision is at the sole discretion of Coffee News.
This provision is particularly relevant if a franchisee seeks to sell their Coffee News franchise to a third party who requires financing and intends to use the franchise as collateral. By allowing for the possibility of extending the term, Coffee News provides flexibility that can facilitate the sale of a franchise, benefiting both the franchisee and the potential buyer. However, the extension is not guaranteed and depends on Coffee News's assessment of the necessity of such an extension for securing financing.