How are Extreme Art Studio's obligations affected by a Force Majeure event?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
ntained in this Franchise Agreement; or our acceptance of any payments due from you after any breach of this Franchise Agreement. No special or restrictive legend or endorsement on any check or similar item given to us will be a waiver, compromise, settlement or accord and satisfaction. We are authorized to remove any legend or endorsement, which then will have no effect.
- 17.2.3 Neither we nor you shall be liable for any delay in the fulfilment of or failure to fulfil its obligations in whole or in part (other than the payment of money as may be owed by a party) under this Franchise Agreement where the delay or failure is solely due to Force Majeure. In the event of Force Majeure, the parties' obligations shall be extended or relieved only to the extent the parties are respectively necessarily prevented or delayed in such performance during the period of such Force Majeure. As used in this Franchise Agreement, the term "Force Majeure" shall mean any act of God, strike, lock-out or other industrial disturbance, war (declared or undeclared), terrorist event, riot, epidemic, fire or other catastrophe, act of any government and any other similar cause which is beyond the party's control and cannot be overcome by use of normal commercial measures. Force Majeure should be construed narrowly and does not include general economic, market or societal conditions, or any changes thereto, even those that are the
direct or indirect result of the Force Majeure event. So, for example, in the event of a temporary government-imposed closure of your Franchised Business due to a Force Majeure event, you may only be relieved of your obligations as necessary to comply with the government mandate or order, but not due to the economic or market conditions that result from that action. The party whose performance is affected by an event of Force Majeure shall give prompt notice of such Force Majeure event to the other party, which in no case shall be more than 48 hours after the event, setting forth the nature thereof and an estimate as to its duration, and the affected party shall furnish the other party with periodic reports regarding the progress of the Force Majeure event. Each party must use its best efforts to mitigate the effect of the event of Force Majeure upon its performance of the Franchise Agreement and to fulfill its obligations under the Franchise Agreement. Upon completion of the event of Force Majeure, the party affected must as soon as reasonably practicable recommence the performance of its obligations under this Franchise Agreement. However, in the event the Force Majeure continues for a period of six months or more, then the unaffected party may, at its option, terminate this Franchise Agreement by 30 days' written notice to the party asserting such Force Majeure.
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to Extreme Art Studio's 2024 Franchise Disclosure Document, neither Extreme Art Studio nor the franchisee is liable for delays or failures to fulfill obligations (excluding monetary payments) if caused solely by a Force Majeure event. In such cases, the obligations are extended or relieved only to the extent that the parties are necessarily prevented or delayed during the Force Majeure event. The definition of Force Majeure is to be construed narrowly and does not include general economic, market, or societal conditions, even if they result directly or indirectly from the Force Majeure event.
For example, if a government-imposed closure of the franchised business occurs due to a Force Majeure event, the franchisee is only relieved of obligations necessary to comply with the government mandate, not due to resulting economic or market conditions. The party affected by a Force Majeure event must promptly notify the other party within 48 hours, detailing the nature and estimated duration of the event, and provide periodic progress reports. Both parties must use their best efforts to mitigate the event's impact and resume performance as soon as reasonably practicable.
However, if the Force Majeure event continues for six months or more, the unaffected party has the option to terminate the Franchise Agreement with 30 days' written notice to the affected party. A Force Majeure event does not relieve a party from obligations that arose before the event, nor does it affect any obligation to pay money owed or to provide indemnification, regardless of when the obligation arose. Additionally, the franchisee's obligations to comply with restrictive covenants in the Franchise Agreement remain in effect during and after the Force Majeure event.