In the event of death or permanent disability, to whom must the Extreme Art Studio franchise interest be transferred?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
- 12.7 YOUR DEATH OR DISABILITY.
Upon your or your Operating Owner's death or Permanent Disability (defined below), you or the Operating Owner's executor, administrator, conservator, guardian or other personal representative must transfer your interest in this Franchise Agreement, or the Operating Owner's ownership interest in you, to a third party approved by us (which may be your or the Operating Owner's heirs, beneficiaries or devisees).
That transfer must be completed within a reasonable
time, not to exceed six months from the date of death or Permanent Disability, and is subject to all of the terms and conditions in this Section 12 (except that any transferee that is the spouse or immediate family member of you or your Operating Owner shall not have to pay the transfer fee described in Section 12.3.2(g) if the transfer meets all the other conditions in Section 12.3). A failure to transfer your interest in this Franchise Agreement or the Operating Owner's ownership interest in you within this time period is a breach of this Franchise Agreement. For purposes of this Section 12.7, "Permanent Disability" means a mental or physical disability, impairment or condition that is reasonably expected to prevent or actually does prevent you or the Operating Owner from supervising the management and operation of the Franchised Business, and condition from which recovery within 90 days from the date of determination of disability is unlikely. If, upon your or the Operating Owner's death or Permanent Disability, a Designated Manager is not managing the Franchised Business, you or the Operating Owner's executor, administrator, conservator, guardian or other personal representative must within a reasonable time, not to exceed 15 days from the date of death or disability, appoint a Designated Manager. The Designated Manager must complete our then-current Initial Training Program at your expense. A new Operating Owner acceptable to us must also be appointed for the Franchised Business within 60 days. We may appoint an Interim Manager and charge you the applicable fee under Section 16.5 if the death or disability of you or your Operating Owner has any impact on the Franchised Business.
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to Extreme Art Studio's 2024 Franchise Disclosure Document, in the event of the franchisee's or the Operating Owner's death or permanent disability, the interest in the Franchise Agreement or the Operating Owner's ownership must be transferred to a third party approved by Extreme Art Studio. This third party may include the heirs, beneficiaries, or devisees of the franchisee or Operating Owner.
The transfer must be completed within a reasonable timeframe, not exceeding six months from the date of death or permanent disability. This transfer is subject to all the standard transfer terms and conditions outlined in Section 12 of the Franchise Agreement. However, if the transferee is the spouse or an immediate family member of the franchisee or Operating Owner, the transfer fee described in Section 12.3.2(g) is waived, provided all other conditions in Section 12.3 are met. Failure to transfer the interest within the specified time constitutes a breach of the Franchise Agreement.
In the event of death or permanent disability, if a Designated Manager is not already managing the Franchised Business, the executor, administrator, conservator, guardian, or other personal representative must appoint one within 15 days. This Designated Manager must complete Extreme Art Studio's then-current Initial Training Program at the expense of the estate or representative. Additionally, a new Operating Owner acceptable to Extreme Art Studio must be appointed within 60 days. If the death or disability impacts the Franchised Business, Extreme Art Studio may appoint an Interim Manager and charge the applicable fee as per Section 16.5.