What are 'MODULES' as they are referenced in the Extreme Art Studio Franchise Agreement?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
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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. Franchisee further agrees that the Module Data is owned by Franchisor and that Franchisor may use the Module Data in any way it chooses.
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- NO TERRITORIAL RIGHTS FOR MODULES. Franchisee agrees and acknowledges that it will not receive any territorial rights whatsoever in connection with the Module(s). Franchisor's affiliate, Kidcreate Studio Franchising, LLC offers each of its franchisees identical rights to each of the Modules and the same curriculum. Accordingly, none of the territorial rights granted to Franchisee under the Franchise Agreement shall apply to the Module(s) selected. Further, Franchisee understands and agrees that other brands that Franchisor and its affiliates license, franchise and operate, including Kidcreate franchisees, may offer identical curriculum using the same names as the Module(s) that Franchisee offers and that Franchisee may face competition from such parties. Franchisee agrees that the presence of Kidcreate franchisees and other parties operating under brands other than Extreme Art are free to offer the Module(s) in Franchisee's Territory and that doing so shall not be considered a violation of the Franchise Agreement. Franchisee agrees that it will not raise any claims against Franchisor regarding competition or territorial encroachment related to the Module(s).
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- MODULE TECHNOLOGY FEE. Franchisee acknowledges and agrees that, in connection with the Module Franchisee shall pay Franchisor an additional monthly "Module Technology Fee" of $250. The Module Technology Fee is in addition to all other fees owed under the Franchise Agreement, which shall be paid at the same time and manner as the Technology Fee. The Module Technology Fee is not refundable under any circumstances. The Franchise Agreement is hereby amended accordingly.
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- GROSS SALES, ROYALTIES AND BRAND FUND CONTRIBUTIONS.
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio Franchise Disclosure Document, a 'Module' refers to an additional service that a franchisee can add to their Extreme Art Business. These modules are added via a 'Module Amendment' to the existing Franchise Agreement.
Currently, Extreme Art Studio offers three specific modules: Craft Academy (with an initial module fee of $15,000), Kidscientific (with an initial module fee of $20,000), and Little Hands Discovery (with an initial module fee of $10,000). A franchisee must pay the total initial module fee upon entering into the Module Amendment, and this fee is non-refundable under any circumstances.
Extreme Art Studio franchisees should also be aware that they will not receive any territorial rights in connection with the Module(s). Additionally, franchisees are required to provide detailed records of all cost, sales, and other sales data associated with the Module(s) they operate, referred to as 'Module Data'. This Module Data is owned by the franchisor, who can use it in any way they choose. Franchisees also pay an additional monthly 'Module Technology Fee' of $250 in connection with the Module.