Is the Extreme Art Rider a separate agreement from the franchise agreement for Extreme Art Studio?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
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- Franchise Agreement and Extreme Art Riders. Franchisee shall exercise the rights under this Addendum only by entering into a separate Extreme Art Rider with Franchisor for each Additional Franchise. Franchisee shall sign the current form of Extreme Art Rider then being used by Franchisor for an Extreme Art franchise for each Additional Franchise. Franchisee acknowledges that the then-current form of Extreme Art Rider may differ from the Extreme Art Rider found in the Franchise Agreement. Franchisee will not be required to pay a separate initial franchise fee.
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- Limited Rights. This Addendum does not grant Franchisee the right to franchise, license, sub-franchise, or sublicense others to operate Franchised Businesses. Only Franchisee (and/or Franchisee affiliated entities Franchisor approves) may develop, open, and operate Additional Franchises pursuant to this Addendum and Extreme Art Riders. This Addendum only grants Franchisee the right to enter into Extreme Art Riders to open Additional Franchises subject to the terms of the franchise agreement for such Additional Franchises. Franchisee is not granted any territorial rights or other rights except those granted under the franchise agreement pursuant to the Extreme Art Riders for the Additional Franchises. Except for the initial franchise fee, Franchisee shall be liable for all costs and expenses incurred in opening the Additional Franchises.
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- Term. This Addendum and Franchisee's right to open Additional Franchises shall terminate as of the date of termination or expiration of the Franchise Agreement.
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to Extreme Art Studio's 2024 Franchise Disclosure Document, the Extreme Art Rider is a separate agreement that a franchisee must enter into with Extreme Art Studio Franchising, LLC for each additional franchise they wish to open. The franchisee must sign the current form of the Extreme Art Rider used by Extreme Art Studio for each additional franchise. The document clarifies that the current form of the Extreme Art Rider may differ from the one found in the initial Franchise Agreement.
Notably, while a franchisee isn't required to pay a separate initial franchise fee for additional franchises under the Extreme Art Rider, they are liable for all other costs and expenses associated with opening these additional locations. The rights granted to the franchisee through the addendum are limited, specifically not allowing them to sub-franchise or sublicense the operation of franchised businesses to others. Only the franchisee or their approved affiliates can develop, open, and operate additional franchises under the Extreme Art Riders.
The Extreme Art Rider's term is tied to the Franchise Agreement, terminating upon the termination or expiration of the original agreement. This addendum grants the franchisee the right to enter into Extreme Art Riders to open additional franchises, subject to the terms outlined in the franchise agreement for those additional franchises. The franchisee does not receive any territorial rights or other rights beyond those specified in the franchise agreement and the Extreme Art Riders for the additional franchises.