What is the length of each additional term in the Devon Creek Successor Franchise Agreement?
Devon_Creek Franchise · 2024 FDDAnswer from 2024 FDD Document
- **4.
TERM.** Unless terminated earlier in accordance with the terms set forth in this Agreement, this Agreement and the Franchise granted hereunder shall commence upon the Effective Date set forth above and terminate on the date that is ten (10) years following the Opening Date, as defined in Section 8 hereof (the "Term").
- **5.
SUCCESSOR OPTIONS.** Subject to the terms and conditions of this Agreement, Franchisee shall have the right, following the expiration of the Term hereof, to enter into a new franchise agreement and other agreements then customarily employed by Franchisor and in the form then generally being offered to prospective franchisees in the state in which the Territory is located (the "Successor Franchise Agreement") for two (2) additional terms of five (5) years each.
The term of each such Successor Franchise Agreement shall commence upon the date of expiration of the immediately preceding term.
Franchisee shall
be charged a successor agreement fee of 10% of the then current initial franchise fee herein referred to as the ("Successor Agreement Fee").
Source: Item 22 — CONTRACTS (FDD page 45)
What This Means (2024 FDD)
According to Devon Creek's 2024 Franchise Disclosure Document, franchisees have the option to enter into a new franchise agreement after the initial term expires. Franchisees can sign a Successor Franchise Agreement for two additional terms. Each of these additional terms is five years in length.
The Successor Franchise Agreement will be the agreement then customarily employed by Devon Creek and in the form then generally being offered to prospective franchisees in the state where the territory is located. The terms of the new agreement may differ from the original agreement, potentially including higher or lower royalty and other fees.
To exercise the option for a Successor Franchise Agreement, a franchisee must request a copy of Devon Creek's current Disclosure Document in writing at least nine months before the expiration of the current term. The franchisee must then execute and return all required documents within 60 days of receiving the Disclosure Document. Franchisees will also be charged a successor agreement fee of 10% of the then current initial franchise fee.