Is a Crawlspace Medic franchisee required to execute a new franchise agreement upon renewal?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
ned, in our sole discretion, to withdraw from your Territory |
| Section in | |||
|---|---|---|---|
| Franchise | |||
| Provision | Agreement | Summary | |
| C. | Requirements for franchisee to renew or extend | Sections 5.2 and 5.3 | Be in full compliance, have no more than three (3) events of default during current term; provide written notice to us at least six months before the end of the term; execute a new franchise agreement; pay us a Successor Agreement fee equal of one thousand five hundred dollars ($1,500); continue to maintain the vehicle with proper insurance, current trade dress and other standards; execute a general release; comply with then-current qualifications and training requirements; including completion of additional training. You may be asked to sign a new Franchise Agreem |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 33–38)
What This Means (2024 FDD)
According to Crawlspace Medic's 2024 Franchise Disclosure Document, a franchisee is required to execute a new franchise agreement to renew their franchise. The initial franchise term is five years, with the option to sign a successor agreement for three additional five-year terms if the franchisee is in good standing and Crawlspace Medic has not decided to withdraw from the franchisee's territory.
To renew the franchise agreement, a Crawlspace Medic franchisee must be in full compliance with the existing agreement and have no more than three events of default during the current term. They must also provide written notice to Crawlspace Medic at least six months before the end of the current term. In addition to executing a new franchise agreement, the franchisee must pay a Successor Agreement fee of $1,500.
Furthermore, the franchisee must continue to maintain their vehicle with proper insurance, current trade dress, and other standards. They are also required to execute a general release and comply with the then-current qualifications and training requirements, including completing additional training. The new Franchise Agreement that a franchisee may be asked to sign could contain materially different terms and conditions than the original Franchise Agreement.
This requirement to sign a new agreement with potentially different terms is not uncommon in franchising, but it is crucial for franchisees to carefully review the new agreement with legal counsel to understand any changes and their implications. Franchisees should be aware that the terms of the renewal agreement could impact their rights and obligations, potentially affecting the profitability and operation of their Crawlspace Medic franchise.