What happens to the Extreme Art Studio Multi-Franchise Addendum if the Franchise Agreement expires?

According to Extreme Art Studio's 2024 Franchise Disclosure Document, the Multi-Franchise Addendum terminates upon the termination or expiration of the Franchise Agreement. The standard franchise term for Extreme Art Studio is 10 years, as detailed in Section 1.4 of the Franchise Agreement and Section 5 of the Multi-Franchise Addendum.

This means that if a franchisee has a Multi-Franchise Addendum, which allows them to open and operate multiple Extreme Art Studio locations, that addendum will no longer be in effect once the initial Franchise Agreement expires or is terminated. If the franchisee wishes to continue operating any Extreme Art Studio locations under a franchise agreement, they would need to renew their Franchise Agreement, provided they meet the requirements for renewal.

To renew the franchise agreement with Extreme Art Studio, a franchisee must provide written notice, be in full compliance with the existing agreement, sign the then-current form of the franchise agreement, sign a release, maintain possession of the studio location, complete refurbishing, and pay a successor franchise fee. The new franchise agreement may also have materially different terms and conditions, including potentially higher royalty and advertising contributions. Therefore, it is crucial for franchisees to understand that the Multi-Franchise Addendum is tied directly to the underlying Franchise Agreement and does not independently extend beyond the agreement's term.