Who is required to execute an Owners Agreement for an Extreme Art Studio franchise?
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)
According to the 2024 Extreme Art Studio Franchise Disclosure Document, the transferee is required to sign the then-current form of Owners Agreement if the transfer involves the Franchise Agreement itself. Alternatively, if the transfer pertains to a controlling ownership interest in the franchisee or one of its owners, then the franchisee is required to sign the Owners Agreement.
This stipulation ensures that Extreme Art Studio maintains consistent control and standards across its franchise network, even when ownership changes hands. The new Owners Agreement may contain provisions that differ significantly from the original Franchise Agreement, including potential adjustments to royalty and marketing fees.
Prospective franchisees should be aware that any transfer of their Extreme Art Studio franchise or a controlling interest in their business will necessitate signing a new Owners Agreement, which could alter the financial and operational terms of their franchise. It is important to carefully review the then-current form of the Owners Agreement before proceeding with any transfer to fully understand the potential implications.