Is a Desi District franchisee required to make renovations to the business as a condition of renewal?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
- 3.2 Successor Agreement. When the term of this Agreement expires, Franchisee may enter into a successor agreement for up to 3 additional periods of 5 years each, subject to the following conditions prior to each expiration:
- (i) Franchisee notifies Desi District Franchise Group 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 Desi District Franchise Group (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 Desi District Franchise Group) renovations and changes to the Business as Desi District Franchise Group requires (including a Remodel, if applicable) to conform to the then-current System Standards;
- (iv) Franchisee and its Owners execute Desi District Franchise Group'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 Desi District Franchise Group's then-standard form) of any and all claims against Desi District Franchise Group, its affiliates, and their respective owners, officers, directors, agents and employees.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, franchisees may be required to make renovations and changes to the business, including a remodel, as a condition of renewal.
Specifically, to renew the franchise agreement for additional 5-year terms (up to 3 additional terms), the franchisee must comply with the existing agreement, notify Desi District of their intent to renew between 90 and 180 days before the current term expires, and make any renovations or changes that Desi District requires to meet the then-current System Standards. This includes completing a remodel if Desi District deems it necessary.
Additionally, the franchisee must execute Desi District's current standard franchise agreement and related documents, which may have materially different terms and fees than the original agreement. The franchisee must also execute a general release of claims against Desi District and its affiliates. However, the franchisee will not pay another initial franchise fee and will not receive more renewal or successor terms than described in the agreement.