What agreement must each owner of an entity operating an Extreme Art Studio franchise sign?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
or indirect) in or perform services for a Competitive Business;
- (d) the transferee's representatives satisfactorily complete our then-current Initial Training Program;
- (e) the owner of the facility in which each Studio is located allows you to transfer the corresponding lease agreement to the transferee;
- (f) the transferee shall (if the transfer is of this Franchise Agreement), or you shall (if the transfer is of a controlling ownership interest in you or one of your owners), sign our then-current form of franchise agreement and related documents, (including, but not limited to, our then-current form of Owners Agreement) any and all of the provisions of which may differ materially from any and all of those contained in this Franchise Agreement, including the Royalty and the Marketing Fees; provided, however, that the term of the new franchise agreement signed will equal the remainder of the then-remaining term of this Franchise Agreement;
- (g) you pay us a transfer fee for each Extreme Art Studio Business to be transferred equal to $10,000 per Extreme Art Studio Business, and the cost of any applicable broker fees and any training required.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 41–42)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio Franchise Disclosure Document, if there is a transfer of a controlling ownership interest, the owner must sign the then-current form of franchise agreement and related documents, including the then-current form of Owners Agreement. The provisions of this agreement may differ materially from those contained in the current Franchise Agreement, including royalty and marketing fees.
Additionally, all individuals and entities who will be direct or indirect owners must execute or have executed a guarantee in the form that Extreme Art Studio prescribes. This ensures that all owners, whether direct or indirect, are bound by the obligations and responsibilities outlined by Extreme Art Studio.
Furthermore, transferring owners are required to sign a general release, in a form satisfactory to Extreme Art Studio, which releases any and all known or unknown claims against Extreme Art Studio, its affiliates, subsidiaries, and their respective shareholders, members, officers, directors, employees, and agents arising before or contemporaneously with the transfer. This release protects Extreme Art Studio from potential liabilities or disputes that may arise from past or current issues related to the franchise operation.