What is the length of the renewal term for an Extreme Art Studio franchise?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in Franchise Agreement and Multi-Franchise Addendum | Summary |
|---|---|---|
| (b) Renewal or extension of the term | Section 13.1 | One additional ten-year term, if you meet the requirements. |
| (c) Requirements for franchisee to renew or extend | Section 13 | The term "renewal" refers to extending our franchise relationship at the end of your initial term and any other renewal or extension of the initial term. Your successor franchise rights permit you to remain as a Franchise after the initial term of your Franchise Agreement expires. You must provide written notice; full compliance; sign then-current form of franchise agreement; sign release; maintain possession of Studio location; complete refurbishing; pay successor franchise fee; and others. You must sign our then-current Franchise Agreement and ancillary documents for the successor term, and this new franchise agreement may have materially different terms and conditions (including, e.g., higher Royalty and advertising contributions) from the Franchise Agreement that covered your original term. The boundaries of your Territory may change, and the fees on renewal will not be greater than the fees that we then impose on similarly situated renewing franchisees. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 43–46)
What This Means (2024 FDD)
According to Extreme Art Studio's 2024 Franchise Disclosure Document, the renewal term for a franchise is one additional ten-year term, assuming the franchisee meets all the specified requirements for renewal. This means that after the initial franchise term of 10 years, a franchisee in good standing has the option to extend their franchise agreement for another decade.
To renew the franchise agreement with Extreme Art Studio, a franchisee must meet several conditions. These include providing written notice of their intent to renew, demonstrating full compliance with the existing franchise agreement, and signing the then-current form of the franchise agreement. Additionally, franchisees must sign a release, maintain possession of the studio location, complete any required refurbishing of the studio, and pay a successor franchise fee.
It's important to note that the new franchise agreement signed for the renewal term may contain materially different terms and conditions compared to the original agreement. These changes could include higher royalty fees and increased advertising contributions. Furthermore, the boundaries of the franchisee's territory may also be subject to change upon renewal. However, Extreme Art Studio states that the fees on renewal will not be greater than the fees that they then impose on similarly situated renewing franchisees.