What are my continuing obligations to Extreme Art Studio after the termination or expiration of the Franchise Agreement?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
imburse us for reasonable costs and expenses (including attorney fees) incurred by us in connection with successfully enforcing, issuing notices of default, or obtaining any remedy arising from your breach of this Franchise Agreement.
15. OUR AND YOUR RIGHTS AND OBLIGATIONS UPON TERMINATION OR EXPIRATION OF THIS FRANCHISE AGREEMENT.
15.1 PAYMENT OF AMOUNTS OWED TO US. You agree to pay us within 15 days after this Franchise Agreement expires or is terminated, or on any later date that we determine, the amounts due to us (or our affiliates), the Royalties, Marketing Fees, interest, and all other amounts owed to us (and our affiliates) which then are unpaid. We have the right to set off any amount you or your owners owe us or our affiliates against any amounts we or our affiliates owe you or your owners. You acknowledge and agree that, upon the termination or expiration of this Franchise Agreement (including any Extreme Art Rider(s) then in effect), we shall not become responsible for paying any other third-party amounts you may owe to such third party.
15.2 MARKS.
- 15.2.1 Removal of Signs and Marks. In the case of expiration, you must deliver to us all Operating Assets and other products and materials containing any Mark or otherwise identifying or relating to an Extreme Art Studio Business on or before the date on which this Franchise Agreement expires. In the case of a termination, you must deliver to us all Operating Assets and other products and materials containing any Mark or otherwise identifying or relating to an Extreme Art Studio Business within seven days after the date this Franchise Agreement is terminated.
- 15.2.2 Additional De-Identification Requirements. When this Franchise Agreement expires or is terminated:
- (a) you may not directly or indirectly at any time or in any manner (except with other Extreme Art Studio Businesses you own and operate) identify yourself or any business as a current or former Extreme Art Studio Business or as one of our current or former Franchise owners; use any Mark, any colorable imitation of a Mark, or other indicia of an Extreme Art Studio Business in any manner or for any purpose; or use for any purpose any trade name, trade or service mark, or other commercial symbol that indicates or suggests a connection or association with us;
- (b) you agree to take the action required to cancel or assign all fictitious or assumed name or equivalent registrations relating to your use of any Mark;
- (c) if you fail to do so in the required time period, you agree to allow us, without liability to you or third parties for trespass or any other claim, to remove any signs or other materials containing any Marks from any other locations used by the Franchised Business;
- (d) you acknowledge that all telephone numbers, facsimile numbers, social media websites, Internet addresses, and email addresses (collectively "Identifiers") used in the operation of the Franchised Business constitutes our assets, and upon termination or expiration of this Franchise Agreement, you will take such action within five days to cancel or assign to us or our designee as determined by us, all of your right, title and interest in and to such Identifiers, and will notify the telephone company and all listing agencies of the termination or expiration of your right to use any Identifiers and any regular, classified or other telephone directory listing associated with the Identifiers, and to authorize a transfer of the same to, or at our direction. You agree to take all action required to cancel all assumed name or equivalent registrations related to your use of the Marks. You acknowledge that we have the sole rights to, and interest in, all Identifiers used by you to promote your Franchised Business and/or associated with the Marks. You hereby irrevocably appoint us, with full power of substitution, as your true and lawful attorney-infact, which appointment is coupled with an interest, to execute such directions and authorizations as may be necessary or prudent to accomplish the foregoing. You further appoint us to direct the telephone company, postal service, registrar, Internet service provider, listing agency, website operator, or any other third party to transfer such Identifiers to us or our designee. The telephone company, postal service, registrar, Internet Service Provider, listing agency, website operator, or any other third party may accept such direction by us pursuant to this Franchise Agreement as conclusive evidence of our right to the Identifiers and our authority to direct their transfer;
- (e) if applicable, immediately: (a) cease using or operating any website or other online presences or electronic mediums, including, but not limited to, social networking websites (such as LinkedIn, Instagram, Twitter, Facebook or YouTube) related to the Franchised Business or the Marks; (b) take any action as may be required to disable such websites or social networking website accounts; and (c) cancel all rights in and to any accounts for such websites;
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to Extreme Art Studio's 2024 Franchise Disclosure Document, several obligations continue after the Franchise Agreement expires or is terminated. You must pay all outstanding amounts, including royalties, marketing fees, and interest, within 15 days of termination or expiration, or any later date that Extreme Art Studio determines. You are also obligated to remove all signs and materials that identify your business as an Extreme Art Studio.
Specifically, you must cease using Extreme Art Studio's trademarks and other identifying marks. This includes refraining from identifying yourself as a current or former franchisee, and you must cancel or assign all registrations related to the use of Extreme Art Studio's marks. All telephone numbers, social media accounts, internet addresses and email addresses used for the Extreme Art Studio business are considered Extreme Art Studio's assets, and you must transfer these back to them within five days of termination or expiration.
Furthermore, a significant continuing obligation is the covenant not to compete. For two years after termination or expiration, you and your owners are restricted from having any interest in a Competitive Business within a 25-mile radius of your former Extreme Art Studio location or any other open or developing Extreme Art Studio. This restriction is designed to protect Extreme Art Studio's market and goodwill. All obligations that by their nature survive the Franchise Agreement's expiration or termination will continue until they are fully satisfied.
Extreme Art Studio may also temporarily remove your webpage from the System Website if you are in default of any obligation under the Franchise Agreement or the System until you fully cure the default. Extreme Art Studio will permanently remove your webpage from the System Website upon the Franchise Agreement's expiration or termination.