What is the duration of the agreement for Dq Treat franchisees, and what other agreements can affect its duration?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
receiving written notice from Company, Licensee will, at its expense, immediately make such changes and use such substitutions to the Trademarks as Company requires.
4. TERM AND RENEWAL.
- 4.1 Term. The term of this agreement starts on the Effective Date and, unless earlier terminated under section 13, runs for:
- (A) 15 years after the target opening date, as determined by Company, if for a new DQ Treat franchise;
- (B) The lesser of 15 years or the remaining term of the transferring licensee's operating agreement, if this agreement is signed as a requirement of a transfer; or
- (C) The renewal term specified in the expiring operating agreement, if this agreement is signed as a requirement of renewal
- 4.2 Expiration Date. Company will designate the expiration date of this agreement on the cover page and the date designated by Company shall control.
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 term of the franchise agreement depends on whether it is a new franchise, a transfer, or a renewal. For a new Dq Treat franchise, the term is 15 years after the target opening date as determined by the company. If the agreement is signed as a requirement of a transfer, the term is the lesser of 15 years or the remaining term of the transferring licensee's operating agreement. For a renewal, the term is the renewal term specified in the expiring operating agreement. The expiration date of the agreement will be designated by Dq Treat on the cover page of the agreement, and that date will control.
Additionally, the duration of the Dq Treat agreement can be affected by early termination as described in section 13 of the agreement. The agreement can also be impacted by the licensee's lease agreement for the restaurant premises. The renewal of the license is contingent upon the licensee having the right to maintain possession of the restaurant premises. This means that the term of the lease can indirectly affect the franchisee's ability to renew their franchise agreement.
Furthermore, the RENEWAL ADDENDUM TO DQ® TREAT OPERATING AGREEMENT states that the term of the agreement starts on the Effective Date and, unless earlier terminated under section 13, runs for the remaining term of Licensee's lease, as designated on the cover page of the Agreement. This indicates that the lease term directly influences the franchise agreement's duration upon renewal. Therefore, franchisees should carefully consider the length and terms of their property lease, as it can significantly impact their ability to operate the Dq Treat franchise for the desired period.