Does state law affect the renewal provisions for a Cr3 American Exteriors franchise?
Cr3_American_Exteriors Franchise · 2025 FDDAnswer from 2025 FDD Document
EXHIBIT A-STATE SPECIFIC ADDENDA TO THE FRANCHISE DISCLOSURE DOCUMENT AND FRANCHISE AGREEMENT
The following State Specific Addendum applies to the Tectum Franchising LLC d/b/a CR3 American Exteriors Disclosure Document and may supersede, to the extent then required by valid applicable state law, certain portions of the Franchise Agreement dated and all related agreements.
The provisions of this State Specific Addendum to Franchise Disclosure Document and Franchise Agreement apply only to those persons residing or operating CR3 American Exteriors LLC in the following states: California, Hawaii, Illinois, Indiana, Maryland, Minnesota, New York, North Dakota, South Dakota, Rhode Island, Virginia, Washington, and Wisconsin.
CALIFORNIA
California Business and Professions Code Sections 20000 through 20043 provide rights to you concerning termination, transfer, or non-renewal of a franchise. If the Franchise Agreement or Agreement contains provisions that are inconsistent with the law, the law will control.
The Franchise Agreement provide for termination upon bankruptcy. This provision may not be enforceable under Federal Bankruptcy Law (11 U.S.C.A. Sec. 101 et. seq.).
The Franchise Agreement contain covenants not to compete which extend beyond the termination of the agreements. These provisions may not be enforceable under California law.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 45–48)
What This Means (2025 FDD)
According to Cr3 American Exteriors' 2025 Franchise Disclosure Document, state laws can indeed affect the renewal provisions of the franchise agreement. Specifically, Exhibit A outlines state-specific addenda that may supersede certain portions of the franchise agreement to the extent required by applicable state law. These addenda apply to individuals residing or operating a Cr3 American Exteriors franchise in California, Hawaii, Illinois, Indiana, Maryland, Minnesota, New York, North Dakota, South Dakota, Rhode Island, Virginia, Washington, and Wisconsin.
In California, for example, the California Business and Professions Code Sections 20000 through 20043 provide franchisees with rights concerning termination, transfer, or non-renewal. The FDD explicitly states that if the franchise agreement contains provisions inconsistent with California law, the law will take precedence. Furthermore, certain provisions in the standard franchise agreement, such as those allowing termination upon bankruptcy or enforcing non-compete covenants extending beyond the agreement's termination, may not be enforceable under California law.
This means that prospective Cr3 American Exteriors franchisees need to be aware of the specific laws in their state that could impact the terms and conditions of their franchise agreement, particularly concerning renewal, termination, and transfer rights. It is crucial for franchisees in the listed states to carefully review Exhibit A and understand how their state's laws modify or supersede the standard franchise agreement. Consulting with a legal professional familiar with franchise law in their specific state is highly recommended to ensure full compliance and understanding of their rights and obligations.