What is the 'Franchise Agreement' referring to in the Extreme Art Studio Module Amendment?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
gnature page follows)
IN WITNESS WHEREOF, the parties have executed and delivered this Extreme Art Rider, to be effective as of the Rider Effective Date.
EXTREME ART STUDIO FRANCHISING, LLC,
a Texas limited liability company
DATED: FRANCHISE OWNER FRANCHISE OWNER (IF YOU ARE A CORPORATION, (IF YOU ARE AN INDIVIDUAL AND NOT A LEGAL ENTITY): LIMITED LIABILITY COMPANY, OR PARTNERSHIP): (Entity Name) (Signature) (Print Name) DATED: DATED:
EXHIBIT H-9
MODULE AMENDMENT TO FRANCHISE AGREEMENT
| This Module Amendment to the Franchise Agreement (the "Module Amendment") is made and entered into this between Extreme Art Studio Franchising, LLC, a Minnesota limited liability company ("Franchisor"), and [franchisee name], a [state and entity type] (referred to herein as "Franchisee"). |
|---|
| RECITALS |
| 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: |
| 1. RECITALS . The Recitals set forth above are hereby incorporated into the terms of this Module Amendment as if fully restated herein. |
| 2. 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. |
| 3. REPORTING REQUIREMENTS . |
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio Franchise Disclosure Document, the 'Franchise Agreement' in the context of the Module Amendment refers to the original agreement between Extreme Art Studio Franchising, LLC and the franchisee. This agreement grants the franchisee the right and obligation to operate an Extreme Art Studio franchised business. The business can be in an in-studio format, a mobile unit location, or a remote format without a physical location, as specified in the initial Franchise Agreement.
The Module Amendment serves to add additional service modules to the existing Extreme Art Business. These modules, such as Craft Academy, Kidscientific, and Little Hands Discovery, come with their own initial module fees ($15,000, $20,000, and $10,000 respectively). The franchisee must pay these fees upon entering into the Module Amendment, and these fees are non-refundable.
Several clauses within the Module Amendment directly affect and amend the original Franchise Agreement. For instance, the definition of 'Gross Sales' in the original Franchise Agreement is expanded to include revenues generated from the new module(s). Consequently, franchisees are obligated to pay standard royalties and brand fund contributions on these additional revenues. Moreover, franchisees are required to provide detailed records of cost and sales information related to the modules to Extreme Art Studio.
It is important to note that the addition of modules does not grant any territorial rights to the franchisee. Extreme Art Studio's affiliate, Kidcreate Studio Franchising, LLC, also offers identical rights to these modules to its franchisees. This means that franchisees may face competition from other brands, including Kidcreate franchisees, even within their existing territory, and this will not be considered a violation of the original Franchise Agreement.