Who is responsible for securing all financing required to develop and operate the Creative World School?
Creative_World_School Franchise · 2025 FDDAnswer from 2025 FDD Document
5.01 School Development. You are responsible for developing the School.
- 4.03 Ownership and Financing.
Instead of leasing a Site, you may propose to purchase, construct, own and operate a School on real property owned by you or through affiliates.
You will meet certain conditions if you or your affiliates own a Site or at any time prior to acquisition, or subsequently, you or your affiliates propose to obtain any financing with respect to the Site or for your School or for any Operating Assets in which any of such items are pledged as collateral securing your performance.
The form of any purchase contract with the seller of a Site and any related documents, and the form of any loan agreement with or mortgage in favor of any lender and any related documents, must be approved by us before you sign them.
Our consent to them may be conditioned upon the inclusion of various terms and conditions, including the following:
(a) a provision which requires any lender or mortgagee concurrently to provide us with a copy of any written notice of deficiency or default under the terms of the loan or mortgage sent to you or your affiliates or the purchaser;
(b) a provision granting us, at our option, the right (but not the obligation) to cure any deficiency or default under the loan or mortgage (should you fail to do so) within 15 days after the expiration of a period in which you may cure such default or deficiency; and
(c) a provision which expressly states that any default under the loan or mortgage, if not cured within the applicable time period, constitutes grounds for termination of this Agreement and any default under this Agreement, if not cured within the applicable time period, also constitutes a default under the loan or mortgage.
If, at any time during the Term, you or your affiliates own the Site, you must sign and deliver to us our standard form of Agreement to Lease, which requires you, at our option, to lease the Site to us or our designee pursuant to our standard form of Lease Agreement if this Agreement is terminated by us for cause, or by you without cause, prior to its expiration.
Source: Item 23 — RECEIPTS (FDD pages 80–247)
What This Means (2025 FDD)
According to the 2025 Creative World School Franchise Disclosure Document, the franchisee is responsible for securing the necessary financing to develop the school. The FDD states that the franchisee is responsible for developing the school. This includes all financial aspects related to site acquisition, construction, and operation.
If a franchisee chooses to purchase, construct, own, and operate a school on real property they own or through affiliates, they must meet certain conditions. Specifically, Creative World School requires approval of any purchase contracts, loan agreements, or mortgages related to the site or the school's operations. This approval may include specific terms, such as requiring the lender to provide Creative World School with copies of any default notices and granting Creative World School the option to cure any default on the loan or mortgage.
Furthermore, if the franchisee or their affiliates own the site, they must sign Creative World School's standard form of Agreement to Lease. This agreement allows Creative World School to lease the site if the franchise agreement is terminated, either by Creative World School for cause or by the franchisee without cause, before its expiration. This provision ensures that Creative World School can maintain control over the location even if the franchise agreement ends prematurely.
In summary, while the franchisee bears the responsibility for securing financing, Creative World School maintains significant oversight and control over the financing arrangements and site ownership to protect its interests and the integrity of the Creative World School system.