What are the requirements for an Extreme Art Studio franchisee to be eligible for renewal?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in Franchise Agreement and Multi-Franchise Addendum | Summary |
|---|---|---|
| (b) Renewal or extension of the term | Section 13.1 | One additional ten-year term, if you meet the requirements. |
| (c) Requirements for franchisee to renew or extend | Section 13 | The term "renewal" refers to extending our franchise relationship at the end of your initial term and any other renewal or extension of the initial term. Your successor franchise rights permit you to remain as a Franchise after the initial term of your Franchise Agreement expires. You must provide written notice; full compliance; sign then-current form of franchise agreement; sign release; maintain possession of Studio location; complete refurbishing; pay successor franchise fee; and others. You must sign our then-current Franchise Agreement and ancillary documents for the successor term, and this new franchise agreement may have materially different terms and conditions (including, e.g., higher Royalty and advertising contributions) from the Franchise Agreement that covered your original term. The boundaries of your Territory may change, and the fees on renewal will not be greater than the fees that we then impose on similarly situated renewing franchisees. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 43–46)
What This Means (2024 FDD)
According to Extreme Art Studio's 2024 Franchise Disclosure Document, franchisees have the option to renew their franchise agreement for one additional ten-year term if they meet certain requirements. The term "renewal" refers to extending the franchise relationship at the end of the initial term, or any other renewal or extension of the initial term. This allows the franchisee to continue operating as an Extreme Art Studio franchisee after the initial Franchise Agreement expires.
To renew, an Extreme Art Studio franchisee must provide written notice to the franchisor. They must also be in full compliance with the existing franchise agreement. Additionally, franchisees are required to sign the then-current form of the franchise agreement and a release. Maintaining possession of the studio location is another requirement for renewal. Franchisees must also complete any required refurbishing of the studio and pay a successor franchise fee.
It is important to note that the new franchise agreement signed for the renewal term may have materially different terms and conditions than the original agreement. These changes could include higher royalty fees and advertising contributions. Furthermore, the boundaries of the franchisee's territory may also change upon renewal. However, the fees charged upon renewal will not be greater than the fees that Extreme Art Studio imposes on similarly situated renewing franchisees.