How much advance written notice is required to renew a Devon Creek franchise agreement?
Devon_Creek Franchise · 2024 FDDAnswer from 2024 FDD Document
| Section in | |||
|---|---|---|---|
| Franchise | |||
| ł | Provision | Agreement | Summary |
| c. | Requirements for franchisee to renew or extend | Sections 5.1 and 5.2 | Be in full compliance, have no more than five (5) events of default during current term, provide written notice to us at least ten months before the end of the term, execute a new franchise agreement, pay us a Successor Agreement Fee of 10% of the then current Initial Franchise Fee, repair, upgrade or replace the equipment and other Franchised Business assets to meet then-current specifications, execute a general release, comply with then-current qualifications and training requirements, including completion of additional training, subject to state law. You may be asked to sign a new Franchise Agreement with materially different terms and conditions than your original Franchise Agreement. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 37–42)
What This Means (2024 FDD)
According to Devon Creek's 2024 Franchise Disclosure Document, a franchisee must provide written notice to Devon Creek at least ten months before the end of the current franchise term to be eligible for renewal. This advance notice is one of several requirements for renewal.
In addition to providing timely written notice, the franchisee must be in full compliance with the franchise agreement and have no more than five events of default during the current term. The franchisee is also required to execute a new franchise agreement, pay a Successor Agreement Fee of 10% of the then-current Initial Franchise Fee, and meet the then-current specifications for the equipment and other franchised business assets.
Furthermore, the franchisee must execute a general release and comply with the then-current qualifications and training requirements, including completing additional training. The FDD also states that the new Franchise Agreement that the franchisee may be asked to sign could contain materially different terms and conditions than the original Franchise Agreement. This means that while a franchisee may have the option to renew, the terms of the renewal agreement could be significantly different and should be carefully reviewed with legal counsel.