Can Extreme Art Studio assign the Franchise Agreement to a third party?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
the liability of Owners or the ability of us to enforce this Franchise Owner Agreement or the obligations; (viii) any right of offset, counterclaim or defense of any Owner, including, without limitation, those which have been waived by Owners pursuant to this Franchise Owners Agreement; or (ix) the expiration, termination or assignment of the Franchise Agreement or any other agreement between you or Franchisee and us or our affiliates.
- 5. Transfers. Owners acknowledge and agree that we have granted the Franchise Agreement to Franchisee in reliance on Owners' business experience, skill, financial resources and personal character. Accordingly, Owners agree: (a) not to sell, encumber, assign, transfer, convey, pledge, merge or give away any direct or indirect interest in this Franchisee, unless Owners first comply with the sections in the Franchise Agreement regarding transfers and assignment, and (b) that any attempt to do so will be a breach of this Owners Agreement and the Franchise Agreement. We may, from time to time, without notice to Owners, assign or transfer any or all of Owners' rights, duties and obligations or any interest therein in this Owners Agreement and, notwithstanding any assignment(s) or transfer(s), the rights, duties and obligations shall be and remain for the purpose of this Owners Agreement. Each and every immediate and successive assignee or transferee of any of the rights, duties or obligations of any interest therein shall, to the extent of such party's interest in the rights duties and/or obligations, be entitled to the benefits of this Owners Agreement to the same extent as if such assignee or transferee were us.
6. Notices.
- (a) Method of Notice. Any notices given under this Owners Agreement shall be in writing and delivered in accordance with the provisions of the Franchise Agreement.
- (b) Notice Addresses.
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to Extreme Art Studio's 2024 Franchise Disclosure Document, Extreme Art Studio Franchising, LLC can assign or transfer any or all of its rights, duties, and obligations under the Owners Agreement without providing notice to the owners. This means that Extreme Art Studio has the right to transfer its responsibilities and benefits of the agreement to another party at any time.
However, if the franchisee wants to transfer their interest in the Extreme Art Studio franchise, the owners must first comply with the sections in the Franchise Agreement regarding transfers and assignment. Any attempt to transfer interest without following the proper procedures will be considered a breach of the Owners Agreement and the Franchise Agreement.
If the franchisee is approved to transfer their franchise, they must pay Extreme Art Studio a transfer fee of $10,000 for each Extreme Art Studio Business to be transferred, plus the cost of any applicable broker fees and required training. Additionally, the franchisee must pay a nonrefundable deposit of $1,000 per Extreme Art Studio Business when requesting approval for the transfer. The franchisee must also ensure the transferee satisfactorily completes Extreme Art Studio's Initial Training Program and that the owner of the facility allows the transfer of the lease agreement to the new franchisee.