Does Force Majeure excuse Extreme Art Studio from monetary obligations?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
- 17.2.3 Neither we nor you shall be liable for any delay in the fulfilment of or failure to fulfil its obligations in whole or in part (other than the payment of money as may be owed by a party) under this Franchise Agreement where the delay or failure is solely due to Force Majeure.
In the event of Force Majeure, the parties' obligations shall be extended or relieved only to the extent the parties are respectively necessarily prevented or delayed in such performance during the period of such Force Majeure.
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to Extreme Art Studio's 2024 Franchise Disclosure Document, a Force Majeure event does not excuse either party from monetary obligations. The franchise agreement states that neither Extreme Art Studio nor the franchisee will be held liable for delays or failures to fulfill obligations due to a Force Majeure event, except for the payment of money owed by either party.
This means that even if unforeseen circumstances like natural disasters or government regulations disrupt operations, the franchisee is still responsible for making all payments to Extreme Art Studio as agreed upon in the franchise agreement. This includes royalties, marketing fees, and any other outstanding amounts.
For a prospective franchisee, this clause highlights the importance of financial planning and risk management. It is crucial to have contingency plans in place to ensure that financial obligations can be met even during challenging times. Franchisees should consider obtaining business interruption insurance or establishing reserve funds to mitigate the impact of potential Force Majeure events on their ability to make timely payments to Extreme Art Studio.