What are the consequences of not adhering to the Extreme Art Rider for an Extreme Art Studio franchise?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
ble on the first day of the month after signing this Franchise Agreement, and monthly thereafter within five days of the end of the calendar month.
- 3.5 OPENING EXTENSION FEE. If you fail to begin operations from your Approved Location within 12 months after signing this Franchise Agreement (or 12 months after signing the Extreme Art Rider for subsequent Extreme Art Studio Business(es)) if you agreed to operate Extreme Art Studio Business, you will pay us $1,000 per month ("Opening Extension Fee"), until either the applicable Extreme Art Studio Business is open or we terminate this Franchise Agreement. Failure to pay the Opening Extension Fee will be a non-cur
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio Franchise Disclosure Document, failing to meet the obligations outlined in the Extreme Art Rider can lead to specific financial penalties and, ultimately, termination of the agreement. Specifically, if a franchisee fails to begin operations at their approved location within 12 months of signing the Extreme Art Rider for subsequent Extreme Art Studio businesses, they will incur an "Opening Extension Fee" of $1,000 per month.
This fee continues until the Extreme Art Studio Business is open or until Extreme Art Studio terminates the Extreme Art Rider. The FDD emphasizes that failure to pay this Opening Extension Fee constitutes a non-curable default, which means Extreme Art Studio has the right to terminate the Extreme Art Rider immediately upon such default. These fees are also nonrefundable.
This policy underscores the importance of adhering to the timelines and requirements set forth in the Extreme Art Rider. For a prospective franchisee, this means carefully planning the opening of any subsequent Extreme Art Studio locations to avoid incurring these fees and the risk of termination. It is crucial to have a clear understanding of the obligations and deadlines specified in the Extreme Art Rider and to ensure sufficient resources are available to meet those requirements.