Is the Extreme Art Studio Owners Agreement affected by additional owners agreements?
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.
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio Franchise Disclosure Document, the Owners Agreement is affected by additional owners agreements under specific circumstances related to franchise transfers.
Specifically, if a franchisee seeks to transfer their franchise to a new owner, the transferee is required to sign Extreme Art Studio's then-current form of franchise agreement and related documents, which includes the then-current form of Owners Agreement. The terms and conditions within this new Owners Agreement may differ significantly from those in the original franchise agreement. This ensures that Extreme Art Studio can update its agreements to reflect current standards and legal requirements at the time of the transfer.
This requirement protects Extreme Art Studio by ensuring that all franchisees operate under the most up-to-date terms and conditions. However, it also means that a potential buyer of an existing Extreme Art Studio franchise must be prepared to accept potentially different terms than those in the original agreement. The new owner must also complete the then-current Initial Training Program to Extreme Art Studio's standards.
Furthermore, the original franchisee must sign a general release of any claims against Extreme Art Studio, its affiliates, and related parties. All individuals and entities who will be direct or indirect owners must execute a guarantee in the form prescribed by Extreme Art Studio. These conditions ensure that Extreme Art Studio maintains control over its franchise system and minimizes potential legal liabilities during franchise transfers.