When does the term of each Successor Franchise Agreement for Devon Creek commence?
Devon_Creek Franchise · 2024 FDDAnswer from 2024 FDD Document
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, a franchisee has the option to enter into a new franchise agreement after the initial term expires. The initial franchise agreement and the franchise granted under it commence on the effective date and terminate ten years following the opening date.
If a franchisee chooses to exercise their successor option, the term for each Successor Franchise Agreement begins when the immediately preceding term expires. Devon Creek offers two additional terms of five years each for these successor agreements.
To obtain a Successor Franchise Agreement, the franchisee must pay a Successor Agreement Fee, which is 10% of the then-current initial franchise fee. This fee is charged for each subsequent five-year term. This ensures the franchisee can continue operating under the Devon Creek brand, provided they meet the terms and conditions outlined in the franchise agreement.