What are the exceptions to Creative World School's right to require additional capital investment?
Creative_World_School Franchise · 2025 FDDAnswer from 2025 FDD Document
hibit "J." The Principal Owner's Statement describes all of your owners and their interests in you.
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ITEM 16 RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL
You must offer for sale all products, and perform all services, that we require from time to time for Schools. You may not offer for sale any products or perform any services that we have not authorized. Our System Standards may regulate required or authorized products, product categories and supplies. We have the right to change the types of required and/or authorized goods and services from time to time. There are no limits on our right to do so, except that we will not require you to invest additional capital in the School if the investment cannot, in our reasonable judgment, be amortized during the remaining term of the Franchise Agreement, unless we agree to extend its term so that the investment can be amortized or unless the investment is necessary to comply with applicable laws.
We will give you 90 days to comply with capital modifications we require, but, if the capital modification requires an expenditure of more than $10,000, we will give you 180 days from the date such request is made to comply with such capital modification. You are obligated to comply with all modifications to System Standards, other than capital modifications, within the time period we specify. We will not require you to spend m
Source: Item 16 — RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL (FDD pages 52–53)
What This Means (2025 FDD)
According to the 2025 Creative World School Franchise Disclosure Document, Creative World School has the right to change the types of required and/or authorized goods and services from time to time. However, there are limits to this right regarding additional capital investments.
Creative World School will not require a franchisee to invest additional capital in the school if the investment cannot, in their reasonable judgment, be amortized during the remaining term of the Franchise Agreement. An exception to this is if Creative World School agrees to extend the term of the agreement so that the investment can be amortized. Another exception is if the investment is necessary to comply with applicable laws.
Creative World School will give franchisees 90 days to comply with capital modifications they require. However, if the capital modification requires an expenditure of more than $10,000, Creative World School will give the franchisee 180 days from the date such request is made to comply with such capital modification. Creative World School will not require franchisees to spend more than 25% of their high estimate of the cost of the sum of leasehold improvements and furniture, fixtures, and equipment during the term of the Franchise Agreement in connection with capital modifications.