What is the purpose of the Owners Agreement required by Extreme Art Studio Franchising, LLC?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
Owners acknowledge and agree that we have granted the Franchise Agreement to Franchisee in reliance on Owners' business experience, skill, financial resources and personal character.
Accordingly, Owners agree: (a) not to sell, encumber, assign, transfer, convey, pledge, merge or give away any direct or indirect interest in this Franchisee, unless Owners first comply with the sections in the Franchise Agreement regarding transfers and assignment, and (b) that any attempt to do so will be a breach of this Owners Agreement and the Franchise Agreement.
We may, from time to time, without notice to Owners, assign or transfer any or all of Owners' rights, duties and obligations or any interest therein in this Owners Agreement and, notwithstanding any assignment(s) or transfer(s), the rights, duties and obligations shall be and remain for the purpose of this Owners Agreement.
Each and every immediate and successive assignee or transferee of any of the rights, duties or obligations of any interest therein shall, to the extent of such party's interest in the rights duties and/or obligations, be entitled to the benefits of this Owners Agreement to the same extent as if such assignee or transferee were us.
6. Notices.
- (a) Method of Notice. Any notices given under this Owners Agreement shall be in writing and delivered in accordance with the provisions of the Franchise Agreement.
- (b) Notice Addresses. Our current address for all communications under this Owners Agreement is:
Extreme Art Studio Franchising, LLC 7566 Market Place Drive Eden Prairie, MN 55344
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to Extreme Art Studio's 2024 Franchise Disclosure Document, the Owners Agreement ensures that the franchisor, Extreme Art Studio Franchising, LLC, can rely on the original owners' business experience, skills, financial resources, and personal character when granting the franchise. This agreement restricts the owners from transferring any direct or indirect interest in the franchise without first complying with the transfer and assignment sections outlined in the Franchise Agreement.
The Owners Agreement states that any attempt to sell, encumber, assign, transfer, convey, pledge, merge, or give away any interest in the franchise without proper compliance will be considered a breach of both the Owners Agreement and the Franchise Agreement. This provision protects Extreme Art Studio's investment in its franchisees by ensuring that any changes in ownership are subject to their approval and adhere to the established transfer protocols.
Extreme Art Studio retains the right to assign or transfer its rights, duties, and obligations under the Owners Agreement without notice to the owners. This allows Extreme Art Studio Franchising, LLC flexibility in managing its own business operations and relationships. The agreement also specifies that any assignee or transferee of Extreme Art Studio's rights will be entitled to the same benefits as the franchisor.
The Owners Agreement includes stipulations regarding notices, requiring that any communication be written and delivered according to the Franchise Agreement's provisions. It also details the addresses for sending notices to both Extreme Art Studio Franchising, LLC and the individual owners, allowing either party to update their address with written notice.