How can the Devon Creek agreement be modified?
Devon_Creek Franchise · 2024 FDDAnswer from 2024 FDD Document
- 5.3 Notice Required by Law. If applicable law requires Franchisor to give notice to Franchisee prior to the expiration of the Term, this Agreement shall remain in effect on a month-to-month basis until Franchisor has given the notice required by such applicable law. If Franchisor is not offering new Devon Creek Franchise Group, LLC, is in the process of revising, amending or renewing Franchisor's form of franchise agreement or disclosure document, or Franchisor is not lawfully able to offer Franchisee the thencurrent form of Successor Franchise Agreement at the time Franchisee advises Franchisor pursuant to Paragraph 5.2 hereof that Franchisee desires to renew, Franchisor may, in Franchisor's sole discretion, (i) offer to renew this Agreement upon the same terms set forth herein for the appropriate successor term or (ii) offer to extend the Term hereof on a month-to-month basis following the expiration of the Term for as long as Franchisor deems necessary or appropriate so that Franchisor may lawfully offer the then current form of Successor Franchise Agreement. Any timeframes specified in this Paragraph 5 shall be inclusive of any state mandated notice periods.
Source: Item 22 — CONTRACTS (FDD page 45)
What This Means (2024 FDD)
Based on the 2024 Devon Creek Franchise Disclosure Document, the franchise agreement can be modified if the franchisor is revising, amending, or renewing the franchise agreement or disclosure document, or if the franchisor is not lawfully able to offer the franchisee the then-current form of Successor Franchise Agreement at the time the franchisee advises the franchisor that they desire to renew. In such cases, Devon Creek may, at its sole discretion, offer to renew the agreement upon the same terms set forth for the appropriate successor term or offer to extend the term on a month-to-month basis following the expiration of the term. This extension continues as long as Devon Creek deems necessary or appropriate, allowing them to lawfully offer the current form of Successor Franchise Agreement.
This provision ensures that Devon Creek retains flexibility in managing franchise agreement renewals, particularly when legal or procedural changes are underway. For a franchisee, this means that the terms of their franchise agreement could be extended temporarily on a month-to-month basis if Devon Creek is in the process of updating its franchise documents or is legally unable to offer a standard renewal agreement. This could impact the franchisee's long-term planning and financial projections, as the terms of the franchise agreement could change upon the availability of the new Successor Franchise Agreement.
It is important for prospective franchisees to understand the conditions under which their franchise agreement might be modified or extended, as this could affect their rights and obligations. Franchisees should maintain open communication with Devon Creek regarding any potential changes to the franchise agreement and seek clarification on how these changes might impact their business operations and financial stability. Additionally, franchisees should seek legal counsel to fully understand their rights and obligations under the franchise agreement and any potential modifications or extensions.