What is the 'Extreme Art Business' referring to in the context of the Module Amendment?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
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:
- RECITALS . The Recitals set forth above are hereby incorporated into the terms of this Module Amendment as if fully restated herein.
- 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.
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio Franchise Disclosure Document, the 'Extreme Art Business' refers to the franchised business that the franchisee is granted the right and obligation to operate under the Franchise Agreement. This business can be operated in one of three formats: an in-studio format from a physical location, a mobile unit, or a remote format without a physical location.
The Module Amendment allows franchisees to add additional service modules to their existing Extreme Art Studio business. These modules include options such as Craft Academy, Kidscientific, and Little Hands Discovery, each with its own initial module fee ($15,000, $20,000, and $10,000 respectively). The franchisee selects the desired modules and pays the corresponding total initial module fee to Extreme Art Studio Franchising, LLC. This fee is non-refundable.
Adding modules requires franchisees to incur increased initial and ongoing expenses, such as inventory, equipment, staff training, and signage. Some of these items must be purchased from Extreme Art Studio's approved vendors. Franchisees acknowledge that these expenses will materially increase the cost of operating the Extreme Art Business and are solely responsible for these costs. Extreme Art Studio makes no guarantees regarding the viability, potential revenues, or success of the added modules.