How can the agreement be amended for a Dq Treat franchise?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
Company and Licensee are entering into the Agreement on the same date as this addendum and want to modify the Agreement as follows:
-
- Section 2.3(A) of the Agreement is amended to include the following language at the end of the paragraph:
- except that Company agrees that, so long as the Agreement remains in effect, it will not operate or issue a license for any other party to operate a competing business using the Trademarks within the areas described as [complete with the protected territory description from the existing franchise agreement.]
-
- Initial Franchise Fee. Section 9.1 of the Agreement is deleted. Licensee is not required to pay an initial franchise fee to Company.
-
- Continuing License Fee. Section 9.2 of the Agreement is deleted and replaced with the following:
Licensee must pay to Company monthly a continuing license fee of:
- (A) for DQ® soft-serve products, [Complete with Licensee's contractual language from the existing franchise agreement]; and
- (B) for all other products, 5% of Gross Sales.
- 4. Sales Promotion Program Fee. Section 9.3 of the Agreement is deleted and replaced with the following:
Licensee must pay to Company monthly a sales promotion program fee equal to 3% of Gross Sales.
-
- Defined Terms. All defined terms used in this addendum but not defined have the same meaning given them in the Agreement.
-
- Construction. In all other respects, the terms and conditions of the Agreement remain in effect as written.
LICENSEE: COMPANY: AMERICAN DAIRY QUEEN CORPORATION Signature: Signature: Print Name: Print Name: Title: Title: Date: Date:
- Effective Date. This addendum is effective on the Effective Date of the Agreement and
terminates upon the earlier of the transfer or termination of the Agreement.
Source: Item 17 — The following paragraph is added to the end of Item 17 of the Disclosure Document: (FDD pages 70–378)
What This Means (2025 FDD)
According to the 2025 Dq Treat FDD, the franchise agreement can be modified through addenda agreed upon by both the Company (American Dairy Queen Corporation) and the Licensee. These addenda are executed on the same date as the operating agreement, signifying mutual consent to the changes. Several sections of the original agreement can be altered in this way.
Specifically, the FDD provides examples of modifications to Section 2.3(A) regarding the operation of competing businesses within a protected territory. Addenda can also delete and replace sections pertaining to fees. For instance, Section 9.1, concerning the initial franchise fee, can be deleted, waiving the franchisee's obligation to pay this fee. Similarly, Section 9.2, which covers continuing license fees, can be replaced with revised terms, potentially including different fee structures for soft-serve and other products. Furthermore, Section 9.3, related to sales promotion program fees, can also be modified through an addendum.
These addenda include specific terms and conditions that supersede the original agreement, such as revised payment schedules or fee percentages. The addenda also clarify that any undefined terms retain the meanings specified in the original agreement, and all other terms and conditions of the original agreement remain in effect unless explicitly modified. These modifications become effective on the agreement's effective date and terminate upon the earlier of the agreement's transfer or termination. This approach ensures that both parties agree to the specific changes, which are documented and integrated into the franchise agreement.