Does Cr3 American Exteriors have the discretion to allow more time to locate a site?
Cr3_American_Exteriors Franchise · 2025 FDDAnswer from 2025 FDD Document
ny proposed site within your Territory will be deemed approved if we do not approve or disapprove within 30 days. If you do not locate a site to begin operations within 4 months of signing the franchise agreement, we may, in our sole discretion: (1) allow more time; (2) terminate the Franchise Agreement without any refund to you; or (3) require you to immediately begin making monthly payments of an amount equal to the Minimum Monthly Royalty Fee. (Franchise Agreement, Section 3.1).
We consider the following factors when reviewing a proposed site: (i) population density, (ii) income levels, (iii) demographics, (iv) competition, (v) visibility, (vi) accessibility, (vii) traffic, (viii) size, (ix) condition and character, (x) parking, and (xi) available signage.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 32–37)
What This Means (2025 FDD)
According to Cr3 American Exteriors' 2025 Franchise Disclosure Document, if a franchisee does not locate a site to begin operations within 4 months of signing the franchise agreement, Cr3 American Exteriors has the discretion to allow more time. Alternatively, Cr3 American Exteriors may terminate the Franchise Agreement without any refund to the franchisee, or require the franchisee to immediately begin making monthly payments of an amount equal to the Minimum Monthly Royalty Fee.
This clause in the franchise agreement provides Cr3 American Exteriors with flexibility regarding the franchisee's site selection. It means that while there is an expected timeline of 4 months, Cr3 American Exteriors can extend this period if they deem it appropriate. However, it also carries the risk that Cr3 American Exteriors could terminate the agreement or demand royalty payments even if the business is not yet operational.
Factors that can affect the time it takes to open for business include obtaining financing, entering into a lease or purchase agreement, complying with zoning, obtaining licenses and permits, performing construction/remodeling, weather conditions, acquiring and installing furniture, fixtures, equipment, and signage, and hiring and training staff. These factors are outside of the control of Cr3 American Exteriors.