Is a new Extreme Art Studio franchisee required to execute a New Franchise Agreement?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
or indirect) in or perform services for a Competitive Business;
- (d) the transferee's representatives satisfactorily complete our then-current Initial Training Program;
- (e) the owner of the facility in which each Studio is located allows you to transfer the corresponding lease agreement to the transferee;
- (f) the transferee shall (if the transfer is of this Franchise Agreement), or you shall (if the transfer is of a controlling ownership interest in you or one of your owners), sign our then-current form of franchise agreement and related documents, (including, but not limited to, our then-current form of Owners Agreement) any and all of the provisions of which may differ materially from any and all of those contained in this Franchise Agreement, including the Royalty and the Marketing Fees; provided, however, that the term of the new franchise agreement signed will equal the remainder of the then-remaining term of this Franchise Agreement;
- (g) you pay us a transfer fee for each Extreme Art Studio Business to be transferred equal to $10,000 per Extreme Art Studio Business, and the cost of any applicable broker fees and any training required. You will pay us a nonrefundable deposit of $1,000 per Extreme Art Studio Business when you request approval of a transfer and pay, in certain funds, the remaining amount when you execute the transfer documents;
- (h) you
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio Franchise Disclosure Document, a new franchisee may be required to sign the then-current form of the franchise agreement if they are a transferee. Specifically, if an existing franchisee transfers their franchise agreement, the transferee must sign Extreme Art Studio's current franchise agreement and related documents.
The new franchise agreement may differ significantly from the original agreement. This includes potential changes to royalty fees, marketing fees, and other provisions. However, the term of the new franchise agreement will only be for the remainder of the original franchise agreement's term.
In addition to signing a new franchise agreement, the transferee must also ensure that their representatives complete the then-current Initial Training Program. The transferee must also obtain permission to transfer the lease agreement from the owner of the facility where the Extreme Art Studio is located. The transferor also has obligations such as paying a transfer fee of $10,000 per Extreme Art Studio Business and signing a general release of claims against Extreme Art Studio.