When does the 15-year term of the Cost Cutters Family Hair Salon Franchise Agreement begin?
Cost_Cutters_Family_Hair_Salon Franchise · 2024 FDDAnswer from 2024 FDD Document
ARTICLE 2 TERM; FRANCHISEE'S OPTION TO REACQUIRE FRANCHISE
- 2.1 TERM. The term of this Agreement will commence on the date set forth on Page F-1 of this Agreement and shall continue until the expiration of fifteen (15) years from the date FRANCHISEE'S Cost Cutters Business granted hereunder opens and commences operation. This Agreement will not be considered executed and will not be enforceable until: (A) it has been signed by COST CUTTERS and the FRANCHISEE, and, if the FRANCHISEE is a corporation or partnership, the personal guarantors; and (B) the signed Agreement has been delivered to the FRANCHISEE.
Source: Item 23 — RECEIPT (FDD pages 76–439)
What This Means (2024 FDD)
According to the 2024 Cost Cutters Family Hair Salon Franchise Disclosure Document, the franchise agreement's term starts on the date listed on Page F-1 of the agreement. The term lasts for 15 years, beginning when the franchisee's Cost Cutters Family Hair Salon opens and starts operations.
For a prospective franchisee, this means the 15-year clock doesn't start ticking when you sign the agreement. It begins once your salon is up and running. This is a common arrangement in franchising, as it aligns the term with the franchisee's actual business operations and revenue generation.
The agreement is only considered fully executed and enforceable once it's signed by both Cost Cutters Family Hair Salon and the franchisee (including personal guarantors if the franchisee is a corporation or partnership) and the signed agreement has been delivered to the franchisee. This ensures that all parties are in agreement and have a copy of the fully executed contract.