Does the Extreme Art Studio Owners Agreement supersede all prior agreements?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
- (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;
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
Based on the 2024 Extreme Art Studio Franchise Disclosure Document, the franchise agreement that a transferee signs may supersede prior agreements. Specifically, if a franchisee transfers their franchise to a new owner, that new owner must sign the then-current form of franchise agreement and related documents, including the then-current form of Owners Agreement.
This new agreement may contain provisions that differ materially from the original franchise agreement, including changes to the royalty and marketing fees. However, the term of the new franchise agreement will equal the remainder of the original agreement's term.
For a prospective Extreme Art Studio franchisee, this means that if they decide to sell their franchise, the buyer will be subject to the franchise agreement terms in place at the time of the transfer, which could be significantly different from the original agreement. This could impact the value and attractiveness of the franchise to potential buyers and should be carefully considered when planning for a future transfer.