What is the deadline for Extreme Art Studio to provide notice of a Force Majeure event?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
Force Majeure should be construed narrowly and does not include general economic, market or societal conditions, or any changes thereto, even those that are the
direct or indirect result of the Force Majeure event. So, for example, in the event of a temporary government-imposed closure of your Franchised Business due to a Force Majeure event, you may only be relieved of your obligations as necessary to comply with the government mandate or order, but not due to the economic or market conditions that result from that action. The party whose performance is affected by an event of Force Majeure shall give prompt notice of such Force Majeure event to the other party, which in no case shall be more than 48 hours after the event, setting forth the nature thereof and an estimate as to its duration, and the affected party shall furnish the other party with periodic reports regarding the progress of the Force Majeure event. Each party must use its best efforts to mitigate the effect of the event of Force Majeure upon its performance of the Franchise Agreement and to fulfill its obligations under the Franchise Agreement. Upon completion of the event of Force Majeure, the party affected must as soon as reasonably practicable recommence the performance of its obligations under this Franchise Agreement. However, in the event the Force Majeure continues for a period of six months or more, then the unaffected party may, at its option, terminate this Franchise Agreement by 30 days' written notice to the party asserting such Force Majeure. An event of Force Majeure does not relieve a party from liability for an obligation which arose before the occurrence of the Force Majeure event, nor does that event affect any obligation to pay money owed under the Franchise Agreement or to indemnify us, whether such obligation arose before or after the Force Majeure event. An event of Force Majeure shall not affect Franchisee's obligations to comply with any restrictive covenants in this Franchise Agreement during or after the Force Majeure event.
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to Extreme Art Studio's 2024 Franchise Disclosure Document, if a Force Majeure event occurs, the party affected must promptly notify the other party. The notification deadline is no more than 48 hours after the event. The notice should detail the nature of the event and provide an estimated duration. The affected party must also provide periodic reports on the progress of the Force Majeure event.
It's important to note that Force Majeure is narrowly construed and doesn't include general economic, market, or societal conditions, even if they result directly or indirectly from the Force Majeure event. For instance, a temporary government-imposed closure of the franchised business due to a Force Majeure event only relieves obligations as necessary to comply with the mandate, not due to resulting economic or market conditions.
Both parties are required to use their best efforts to mitigate the impact of the Force Majeure event and resume fulfilling their obligations as soon as reasonably possible. However, if the Force Majeure continues for six months or more, the unaffected party has the option to terminate the Franchise Agreement with 30 days' written notice to the party experiencing the Force Majeure. The Force Majeure event does not relieve a party from obligations that arose before the event, including monetary obligations or indemnification duties. Additionally, the franchisee's obligations to comply with restrictive covenants remain in effect during and after the Force Majeure event.