Does the Counselor Realty franchise agreement specify what constitutes 'reasonable upgrading and refurbishment'?
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)
The 2025 Counselor Realty Franchise Disclosure Document does not define what constitutes 'reasonable upgrading and refurbishment' of an office. However, the franchise agreement states that if a franchisee applies for a successor franchise term, they must complete reasonable upgrading and refurbishment of their office to meet the then-current System standards.
Because the term 'reasonable upgrading and refurbishment' is not defined, a prospective franchisee should seek clarification from Counselor Realty regarding the specific requirements and costs associated with these upgrades. This is especially important to understand the potential financial obligations at the time of renewal.
Without a clear definition in the FDD, the interpretation of 'reasonable upgrading and refurbishment' is subject to Counselor Realty's discretion. This could potentially lead to disputes or unexpected expenses for the franchisee when seeking a successor franchise. Therefore, it is crucial for prospective franchisees to discuss this aspect with Counselor Realty and possibly negotiate specific terms or limitations in the franchise agreement to avoid ambiguity.