What is the dependency between applying for a successor franchise and being in breach of the Counselor Realty agreement?
Counselor_Realty Franchise · 2025 FDDAnswer from 2025 FDD Document
- 3.2 Successor Franchise. If you apply in writing between 60 and 180 days before expiration of the initial term and are not in breach of this Agreement (or any related agreement) at the expiration of the initial term, you may acquire a single successor franchise for five years, using the form of Counselor Franchise Agreement we are then using (which may differ from this Agreement), but without further renewal. Your Franchise Agreement for the successor term, if any, will include a new minimum Office sales agent requirement schedule negotiated by you and Counselor. Upon renewal of your franchise and during the successor term, if any, (i) your Territory may be altered if the population in your Territory has increased to exceed the maximum population then allowed by Counselor for a single franchise territory or if you failed to maintain the minimum number of agents during the prior term, and (ii) you must pay all fees in the amount then being charged by Counselor for new franchises. You also must first complete reasonable upgrading and refurbishment of your Office (including any Additional Offices and Extension Offices, if applicable) to then-current System standards.
Source: Item 22 — CONTRACTS (FDD page 32)
What This Means (2025 FDD)
According to Counselor Realty's 2025 Franchise Disclosure Document, a franchisee's eligibility to obtain a successor franchise is contingent upon not being in breach of the existing franchise agreement. Specifically, to be eligible for a successor franchise, the franchisee must apply in writing between 60 and 180 days before the expiration of the initial term and must not be in breach of the existing agreement or any related agreements at the time of the initial term's expiration.
If a Counselor Realty franchisee meets these conditions, they may acquire a single successor franchise for an additional five years. This successor franchise will be based on the then-current Counselor Franchise Agreement, which may differ from the original agreement. The new agreement will include a renegotiated minimum sales agent requirement for the office.
Upon renewal and during the successor term, Counselor Realty may alter the franchisee's territory if the population has increased beyond the maximum allowed for a single franchise or if the franchisee failed to maintain the minimum number of agents during the prior term. Additionally, the franchisee must pay all fees currently charged for new franchises and complete upgrades and refurbishment of the office to meet the current system standards. This ensures that the franchise remains compliant with Counselor Realty's standards and reflects the current market conditions.