Is a Desi District remodel required 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, a remodel of the location may be required as a condition for renewal of the franchise agreement. Specifically, to renew for additional terms of 5 years each, the franchisee must comply with several conditions. One of these conditions is that the franchisee must make or agree to make renovations and changes to the business, including a remodel if Desi District requires it, to conform to the then-current System Standards.
This means that as a Desi District franchisee approaches the end of their initial 10-year term, they should be prepared to potentially invest in a remodel to meet the brand's current standards if required. The need for a remodel will be determined by Desi District.
It is important to note that the franchisee must also meet other conditions to be eligible for renewal, such as being in compliance with the franchise agreement, executing the then-current franchise agreement (which may have different terms and fees), and releasing all claims against Desi District. Therefore, while a remodel is a significant potential expense, it is only one of several factors that will determine whether a franchisee can renew their agreement.