What happens if the Opening Extension Fee is not paid for an Extreme Art Studio?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
ble on the first day of the month after signing this Franchise Agreement, and monthly thereafter within five days of the end of the calendar month.
- 3.5 OPENING EXTENSION FEE. If you fail to begin operations from your Approved Location within 12 months after signing this Franchise Agreement (or 12 months after signing the Extreme Art Rider for subsequent Extreme Art Studio Business(es)) if you agreed to operate Extreme Art Studio Business, you will pay us $1,000 per month ("Opening Extension Fee"), until either the applicable Extreme Art Studio Business is open or we terminate this Franchise Agreement. Failure to pay the Opening Extension Fee will be a non-cur
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to Extreme Art Studio's 2024 Franchise Disclosure Document, failing to pay the Opening Extension Fee constitutes a non-curable default, which means the franchisee cannot remedy the situation to avoid further consequences. As a result of this default, Extreme Art Studio has the right to terminate the Franchise Agreement or any Extreme Art Rider associated with it.
The Opening Extension Fee applies if the franchisee does not begin operations at their approved location within 12 months of signing the Franchise Agreement, or 12 months after signing the Extreme Art Rider for subsequent businesses. This fee is $1,000 per month and continues until the Extreme Art Studio Business is open or the Franchise Agreement is terminated.
This policy highlights the importance of adhering to the opening timeline outlined in the Franchise Agreement. Prospective Extreme Art Studio franchisees should carefully consider their ability to meet the opening requirements and have sufficient capital to cover the Opening Extension Fee if delays occur. The non-curable default provision underscores the seriousness with which Extreme Art Studio views timely openings and the potential financial and contractual risks for franchisees who fail to meet these obligations.