What is the legal basis for 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 . In addition to information that Franchisee must |
EXTREME
provide under the Franchise Agreement, Franchisee will maintain detailed records of all cost information, sales information, and other sales data associated with the Module(s) that it operates ("Module Data").
Franchisee agrees to provide the Module Data to Franchisor at Franchisor's request and in accordance with the recordkeeping and reporting requirements of the Franchise Agreement and the Franchise Agreement is hereby amended accordingly.
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to Extreme Art Studio's 2024 Franchise Disclosure Document, the legal basis for the Module Amendment to the Franchise Agreement is rooted in the mutual agreement between Extreme Art Studio Franchising, LLC, the franchisor, and the franchisee. The Module Amendment allows the franchisee to add one or more additional service modules to their existing Extreme Art Business. This is formalized through a written agreement, with both parties intending to be legally bound by the terms outlined in the amendment. The amendment references the original Franchise Agreement, incorporating its capitalized terms and reaffirming its continued force and effect, except as specifically modified by the Module Amendment.
The Module Amendment outlines specific recitals that form the foundation of the agreement, including the franchisee's desire to add service modules to their Extreme Art Business. It also specifies that the franchisee and franchisor are entering into the Module Amendment to formally add these modules to the existing Franchise Agreement. The agreement emphasizes that it is based on mutual consideration, with both parties acknowledging the receipt and sufficiency of this consideration.
By entering into the Module Amendment, the franchisee agrees to pay an initial module fee, which is non-refundable. The amendment also stipulates that revenues from the added modules will be included in the definition of "Gross Sales" under the original Franchise Agreement, and the franchisee will pay royalties and brand fund contributions on these amounts. Furthermore, the franchisee acknowledges that operating the modules will require increased initial and ongoing expenses, for which they are solely responsible. The franchisor makes no guarantees regarding the viability or success of the modules. The Module Amendment represents the entire agreement between the parties regarding the modules, superseding any prior oral or other agreements.