What outstanding payments must be settled before an Extreme Art Studio franchise transfer can be approved?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
You agree to pay us within 15 days after this Franchise Agreement expires or is terminated, or on any later date that we determine, the amounts due to us (or our affiliates), the Royalties, Marketing Fees, interest, and all other amounts owed to us (and our affiliates) which then are unpaid.
- (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;
- (k) if you or your owners finance any part of the purchase price, you and/or your owners agree that all of the transferee's obligations under promissory notes, agreements, or security interests reserved in the Franchised Business are subordinate to the transferee's obligation to pay the Royalty, Marketing Fees, and other amounts due to us, our affiliates, and third-party vendors, and otherwise to comply with this Franchise Agreement;
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio Franchise Disclosure Document, before a franchise can be transferred, all outstanding amounts owed to Extreme Art Studio or its affiliates must be paid. This includes Royalties, Marketing Fees, interest, and any other unpaid amounts. These payments must be settled within 15 days after the Franchise Agreement expires or is terminated, or on any later date that Extreme Art Studio determines.
Additionally, the franchisee must pay Extreme Art Studio a transfer fee of $10,000 for each Extreme Art Studio Business being transferred. This is in addition to covering the costs of any applicable broker fees and required training. A nonrefundable deposit of $1,000 per Extreme Art Studio Business is due when requesting transfer approval, with the remaining balance payable upon execution of the transfer documents.
Furthermore, if the franchisee or their owners finance any part of the purchase price, they must agree that the transferee's obligations to pay Royalties, Marketing Fees, and other amounts due to Extreme Art Studio, its affiliates, and third-party vendors take precedence over any obligations under promissory notes, agreements, or security interests related to the Franchised Business. This ensures that Extreme Art Studio's financial interests are protected during the transfer process.
In summary, a prospective Extreme Art Studio franchisee needs to be aware of all the costs associated with transferring a franchise, including transfer fees, outstanding payments, and the priority of financial obligations to Extreme Art Studio. Ensuring all these financial obligations are met is crucial for a smooth and approved franchise transfer.