Is a Desi District franchisee required to renovate their business as a condition of renewal?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
regulation, or executive order.
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 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;
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 complete renovations and changes, including a remodel, as a condition of renewing their franchise agreement. Specifically, to be eligible for a successor agreement, a franchisee must make or agree to make renovations and changes to the business as Desi District requires to conform to the then-current System Standards. This includes a remodel, if applicable.
This requirement means that a prospective Desi District franchisee should be prepared to invest additional capital in the business to meet the franchisor's updated standards at the time of renewal. The FDD does not specify the potential cost of these renovations, so it is important for a potential franchisee to discuss with the franchisor what the potential scope and cost of these required renovations might be.
It is also important to note that the franchisee must comply with the current System Standards at the time of renewal, execute the franchisor's current standard form of franchise agreement, and execute a general release of any claims against Desi District. These conditions collectively ensure that the franchisee is up-to-date with the brand's standards and legal requirements before continuing the franchise relationship.