What is the definition of a 'Module' in the context of an Extreme Art Studio franchise?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
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IN WITNESS WHEREOF, the parties have executed and delivered this Extreme Art Rider, to be effective as of the Rider Effective Date.
EXTREME ART STUDIO FRANCHISING, LLC,
a Texas limited liability company
DATED: FRANCHISE OWNER FRANCHISE OWNER (IF YOU ARE A CORPORATION, (IF YOU ARE AN INDIVIDUAL AND NOT A LEGAL ENTITY): LIMITED LIABILITY COMPANY, OR PARTNERSHIP): (Entity Name) (Signature) (Print Name) DATED: DATED:
EXHIBIT H-9
MODULE AMENDMENT TO FRANCHISE AGREEMENT
| This Module Amendment to the Franchise Agreement (the "Module Amendment") is made and entered into this between Extreme Art Studio Franchising, LLC, a Minnesota limited liability company ("Franchisor"), and [franchisee name], a [state and entity type] (referred to herein as "Franchisee"). |
|---|
| RECITALS |
| WHEREAS, on [date], Franchisor and Franchisee entered into a franchise agreement (the "Franchise Agreement") pursuant to which Franchisee is granted the right, and undertook the obligation, to open and operate a Extreme Art Studio franchised business using either: (i) an in-studio format operated from a location; (ii) a mobile unit location; or (iii) a remote format that does not have a physical location as indicated in the Franchise Agreement (the "Extreme Art Business"); |
| WHEREAS, Franchisee desires to add one or more additional service modules (each a "Module") to the Extreme Art Business as indicated below. |
| WHEREAS, Franchisee and Franchisor are entering into this Module Amendment in order to add the Module(s) indicated below to the Franchise Agreement. Capitalized terms not defined herein shall have the meaning set forth in the Franchise Agreement. |
| NOW THEREFORE, in consideration of the mutual agreements, covenants and promises contained in this Module Amendment and for mutual consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the parties agree as follows: |
| 1. RECITALS . The Recitals set forth above are hereby incorporated into the terms of this Module Amendment as if fully restated herein. |
| 2. MODULE SELECTION AND INITIAL MODULE FEE . Franchisee wishes to add the services and offer the Module(s) through the Extreme Art Business in accordance with the terms of this Module Amendment. The Module(s) that Franchisee desires to add to the Extreme Art Business are as follows (check all that apply): |
| Craft Academy ($15,000 initial module fee) |
| Kidscientific ($20,000 initial module fee) |
| Little Hands Discovery ($10,000 initial module fee) |
| Total initial module fee: $ Franchisee shall pay the total initial module fee to Franchisor upon entering into this Module Amendment. Franchisee acknowledges and agrees that the initial module fee payment is not refundable under any circumstances. |
| 3. REPORTING REQUIREMENTS . In addition to information that Franchisee must |
EXTREME
provide under the Franchise Agreement, Franchisee will maintain detailed records of all cost information, sales information, and other sales data associated with the Module(s) that it operates ("Module Data").
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio Franchise Disclosure Document, a 'Module' refers to additional service modules that a franchisee can add to their Extreme Art Business. These modules are incorporated through a 'Module Amendment' to the existing Franchise Agreement.
The Module Amendment outlines the terms and conditions for adding these services. Franchisees can select from options such as Craft Academy, Kidscientific, and Little Hands Discovery, each carrying its own initial module fee ($15,000, $20,000, and $10,000 respectively). The franchisee must pay the total initial module fee upon entering into the Module Amendment, and this fee is non-refundable.
Adding a module requires the franchisee to incur increased initial and ongoing expenses, including inventory, equipment, supplies, staff training, and signage, some of which must be purchased from approved vendors. The franchisor makes no guarantees regarding the viability, potential revenues, income, profits, or success of the added modules. The franchisee is still obligated to pay royalties and brand fund contributions on revenues generated by the module.
Prospective franchisees should carefully consider the costs and potential benefits of adding modules to their Extreme Art Studio business, understanding that the franchisor provides no assurances of success and that additional expenses will be incurred. Franchisees should also be aware that the definition of 'Gross Sales' in the Franchise Agreement will include revenues from the Module(s) and Franchisee agrees to pay the standard applicable Royalties and Brand Fund Contributions under the Franchise Agreement on all such amounts.