Does the Extreme Art Rider prohibit any specific actions for Extreme Art Studio franchisees?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
- 5.6 NON-DISPARAGEMENT.
You agree not to (and to use your best efforts to cause your current and former shareholders, members, officers, directors, principals, agents, partners, employees, representatives, attorneys, spouses, affiliates, successors and assigns, not to) disparage or otherwise speak or write negatively, directly, or indirectly, of us, our affiliates, any of our or our affiliates' directors, officers, employees, representatives or affiliates, current and former franchisees of us or our affiliates, the Extreme Art Studio brand, the System, any Extreme Art Studio Business, any business using the Marks, any other brand or service-marked or trademarked concept of us or our affiliates, or which would subject the Extreme Art Studio brand or such other brands to ridicule, scandal, reproach, scorn, or indignity, or which would negatively impact the goodwill of us, the Extreme Art Studio brand, or such other brands.
- 5.7 OWNERS BOUND.
Unless otherwise specified, each and every one of your obligations to take or refrain from taking specific actions, or to engage or refrain from engaging in specific activities, set forth in this Section 5, shall also apply to each of your owners.
6. CONFIDENTIAL INFORMATION.
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 Rider does place certain restrictions and obligations on franchisees.
The Franchise Agreement stipulates that franchisees must not disparage Extreme Art Studio, its affiliates, directors, officers, employees, representatives, franchisees, the Extreme Art Studio brand, the System, any Extreme Art Studio Business, any business using the Marks, or any other brand or service-marked or trademarked concept of Extreme Art Studio or its affiliates. This includes refraining from speaking or writing negatively, directly or indirectly, or engaging in actions that would subject the brand to ridicule, scandal, reproach, scorn, or indignity, or negatively impact the goodwill of Extreme Art Studio.
Furthermore, the Franchise Agreement outlines prohibited activities, including owning, operating, or having any interest in a Competitive Business (other than owning an interest of five percent (5%) or less in a publicly-traded company that is a Competitive Business); and/or diverting or attempting to divert any business from Extreme Art Studio (or one of its affiliates or franchisees). These restrictions aim to protect the brand's reputation and prevent franchisees from engaging in activities that could harm the franchise system.
These obligations extend not only to the franchisee but also to their owners, ensuring that all parties associated with the franchise adhere to the outlined restrictions. Franchisees should carefully review Section 5 of the Franchise Agreement to fully understand their obligations and restrictions to avoid potential breaches of contract.