What is the significance of the 'WHEREAS' clauses in the Extreme Art Studio Module Amendment?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
| This Module Amendment to the Franchise Agreement (the "Module Amendment") is made and entered into this between Extreme Art Studio Franchising, LLC, a Minnesota limited liability company ("Franchisor"), and [franchisee name], a [state and entity type] (referred to herein as "Franchisee"). |
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| RECITALS |
| WHEREAS, on [date], Franchisor and Franchisee entered into a franchise agreement (the "Franchise Agreement") pursuant to which Franchisee is granted the right, and undertook the obligation, to open and operate a Extreme Art Studio franchised business using either: (i) an in-studio format operated from a location; (ii) a mobile unit location; or (iii) a remote format that does not have a physical location as indicated in the Franchise Agreement (the "Extreme Art Business"); |
| WHEREAS, Franchisee desires to add one or more additional service modules (each a "Module") to the Extreme Art Business as indicated below. |
| WHEREAS, Franchisee and Franchisor are entering into this Module Amendment in order to add the Module(s) indicated below to the Franchise Agreement. Capitalized terms not defined herein shall have the meaning set forth in the Franchise Agreement. |
| NOW THEREFORE, in consideration of the mutual agreements, covenants and promises contained in this Module Amendment and for mutual consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the parties agree as follows: |
| 1. RECITALS . The Recitals set forth above are hereby incorporated into the terms of this Module Amendment as if fully restated herein. |
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to Extreme Art Studio's 2024 Franchise Disclosure Document, the 'WHEREAS' clauses, also known as recitals, in the Module Amendment to the Franchise Agreement serve to provide context and background for the agreement. These clauses outline the existing relationship between Extreme Art Studio Franchising, LLC (the Franchisor) and the Franchisee, referencing the original Franchise Agreement and the franchisee's right and obligation to operate an Extreme Art Studio business. The recitals also state the franchisee's desire to add one or more additional service modules to their existing Extreme Art Business.
These 'WHEREAS' clauses are significant because they establish the foundation upon which the Module Amendment is built. They clarify that both parties are entering into the amendment with a mutual understanding of their existing agreement and the franchisee's intention to expand their services. By incorporating these recitals into the terms of the Module Amendment, Extreme Art Studio ensures that the new agreement is interpreted in light of the original Franchise Agreement. This helps to avoid any potential misunderstandings or disputes regarding the scope and purpose of the amendment.
For a prospective Extreme Art Studio franchisee, understanding the 'WHEREAS' clauses is crucial as it highlights the interconnectedness of the original Franchise Agreement and any subsequent amendments. It emphasizes that the franchisee is not entering into a completely new agreement, but rather modifying an existing one. This can have implications for the franchisee's rights and obligations, as the terms of the original agreement will continue to apply unless specifically modified by the amendment. The franchisee should carefully review both the original Franchise Agreement and the Module Amendment to fully understand their contractual obligations and the scope of the additional services they are adding to their business.
Furthermore, the 'WHEREAS' clauses underscore the importance of mutual agreement and consideration in contract law. They state that the Module Amendment is entered into "in consideration of the mutual agreements, covenants and promises" and that the parties intend to be legally bound. This reinforces the enforceability of the agreement and highlights the commitment of both parties to fulfill their respective obligations. Franchisees should be aware that by signing the Module Amendment, they are legally bound to the terms and conditions outlined therein, including the payment of any associated fees and adherence to the franchisor's standards and procedures.