Under what conditions can a Crown Gold Exchange franchisee enter into a successor agreement?
Crown_Gold_Exchange Franchise · 2024 FDDAnswer from 2024 FDD Document
ARTICLE 3. TERM
- 3.1 Term. This Agreement commences on the Effective Date and continues for 10 years.
- 3.2 Successor Agreement. When the term of this Agreement expires, Franchisee may enter into a successor agreement subject to the following conditions prior to each expiration:
- (i) Franchisee notifies Crown Gold Franchising of the election to renew between 90 and 180 days prior to the end of the term;
- (ii) Franchisee (and its affiliates) are in compliance with this Agreement and all other agreements with Crown Gold Franchising (or any of its affiliates) at the time of election and at the time of renewal;
- (iii) Franchisee has made or agrees to make (within a period of time acceptable to Crown Gold Franchising) renovations and changes to the Business as Crown Gold Franchising requires (including a Remodel, if applicable) to conform to the thencurrent System Standards;
- (iv) Franchisee and its Owners execute Crown Gold Franchising's then-current standard form of franchise agreement and related documents (including personal guaranty), which may be materially different than this form (including, without limitation, higher and/or different fees), except that Franchisee will not pay another initial franchise fee and will not receive more renewal or successor terms than described in this Section;
- (v) Franchisee and each Owner executes a general release (on Crown Gold Franchising's then-standard form) of any and all claims against Crown Gold Franchising, its affiliates, and their respective owners, officers, directors, agents and employees.
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to Crown Gold Exchange's 2024 Franchise Disclosure Document, a franchisee can enter into a successor agreement when their initial franchise term expires, provided they meet specific conditions. The initial term of the agreement is 10 years. To be eligible for a successor agreement, the franchisee must notify Crown Gold Franchising of their intent to renew between 90 and 180 days before the current term ends.
The franchisee and its affiliates must be in full compliance with the existing franchise agreement and any other agreements with Crown Gold Franchising at both the time of election and the time of renewal. This includes adhering to all operational standards and fulfilling all financial obligations. Additionally, the franchisee must complete or agree to complete any required renovations or changes to the business to meet the then-current System Standards, including potential remodels.
Furthermore, the franchisee and all owners must execute Crown Gold Franchising's current standard franchise agreement and related documents, including a personal guaranty. These documents may differ materially from the original agreement and could include higher or different fees. However, the franchisee will not be required to pay another initial franchise fee and will not receive more renewal or successor terms than initially described. Finally, the franchisee and each owner must sign a general release of all claims against Crown Gold Franchising and its affiliates.