What is the 'Interim Term' in the context of an expired Extreme Art Studio franchise agreement?

Based on the 2024 Franchise Disclosure Document, the term 'Interim Term' is not explicitly defined within the context of an expired Extreme Art Studio franchise agreement. However, the document does discuss the conditions under which a franchisee can acquire a successor franchise agreement.

Specifically, Section 13.1 outlines the franchisee's right to acquire a successor franchise for an additional ten years, provided they meet certain conditions. These conditions include substantial compliance with the existing agreement, adherence to system standards, updating operating assets if required, paying a successor franchise fee (10% of the then-current initial franchise fee), and securing rights to use approved studio locations. The franchisor also has the option to extend the existing franchise agreement to allow the franchisee time to correct any deficiencies or to provide the required 90-day notice of refusal to grant a successor franchise.

While the FDD does not use the term 'Interim Term,' it does address the period between the expiration of the original agreement and the potential commencement of a successor agreement. During this time, the franchisee must continue to meet all obligations of the original agreement to be eligible for renewal. If deficiencies exist, the franchisor will provide notice and an opportunity to cure them. A prospective franchisee should seek clarification from Extreme Art Studio regarding their obligations and rights during this period to ensure a smooth transition, or potential cessation of operations, at the end of the initial term.