What is the length of the renewal term offered to Extreme Art Studio franchisees?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in Franchise Agreement and Multi-Franchise Addendum | Summary |
|---|---|---|
| (a) Length of the franchise term | Section 1.4 of Franchise Agreement and Section 5 of Multi-Franchise Addendum (Exhibit H-7) | 10 years. The Multi-Franchise Addendum terminates upon termination or expiration of the Franchise Agreement. |
| (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 |
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, franchisees are eligible for one additional term of ten years, provided they meet certain requirements. This means that after the initial franchise term expires, a franchisee in good standing has the option to extend their agreement for another decade, allowing them to continue operating their Extreme Art Studio business.
To renew their franchise agreement with Extreme Art Studio, franchisees 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 is important to note that the terms and conditions of the renewed franchise agreement may differ significantly from the original agreement. Extreme Art Studio specifies that the new agreement could include higher royalty and advertising contributions. Furthermore, the boundaries of the franchisee's territory may be subject to change upon renewal. While the fees on renewal will not be greater than the fees that Extreme Art Studio then imposes on similarly situated renewing franchisees, potential franchisees should carefully consider these factors and be prepared for possible changes in the financial and operational aspects of their business upon renewal.