Are there any financial obligations associated with the Extreme Art Rider for Extreme Art Studio?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
ble on the first day of the month after signing this Franchise Agreement, and monthly thereafter within five days of the end of the calendar month.
- 3.5 OPENING EXTENSION FEE. If you fail to begin operations from your Approved Location within 12 months after signing this Franchise Agreement (or 12 months after signing the Extreme Art Rider for subsequent Extreme Art Studio Business(es)) if you agreed to operate Extreme Art Studio Business, you will pay us $1,000 per month ("Opening Extension Fee"), until either the applicable Extreme Art Studio Business is open or we terminate this Franchise Agreement. Failure to pay the Opening Extension Fee will be a non-curable default hereunder, and we may terminate this Franchise Agreement (or the Extreme Art Rider applicable thereto) upon such default. The Opening Extension Fees are nonrefundable.
- 3.6 IMPLEMENTATION FEES. Prior to opening each Extreme Art Studio Business, you must: (i) purchase a license for database management software ("DB Software") from third parties we designate; and (ii) pay us our then-current fee to implement the DB Software (currently $1,500). You must also pay us our then-current fee to implement your class registration software ("CR Software") (currently $500). These fees are separately payable for each Extreme Art Studio Business you have the right to open, are payable upon execution of this Franchise Agreement (and each Extreme Art Rider applicable to such Extreme Art Studio Business) and are nonrefundable.
- 3.7 MODULES. You may also, at your option purchase the right to add modules of certain additional services to be offered at your Extreme Art Business, which are currently Craft Academy, Kidscientific and Little Hands Discovery. In order to add any module, you will enter into our then-current form of Module Amendment with us, the current form of which is attached to the Franchise Disclosure Document in Exhibit H.
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio Franchise Disclosure Document, there are several financial obligations associated with the Extreme Art Rider. Specifically, if a franchisee fails to open their Extreme Art Studio Business within 12 months of signing the Extreme Art Rider, they will incur an "Opening Extension Fee" of $1,000 per month until the business opens or the Extreme Art Rider is terminated. Failure to pay this fee constitutes a non-curable default, potentially leading to termination of the Extreme Art Rider. These Opening Extension Fees are nonrefundable.
Additionally, prior to opening each Extreme Art Studio Business, franchisees must purchase a license for database management software (DB Software) from designated third parties and pay Extreme Art Studio a fee of $1,500 to implement the DB Software. Franchisees must also pay Extreme Art Studio a $500 fee to implement class registration software (CR Software). These fees are payable upon execution of each Extreme Art Rider and are nonrefundable.
Furthermore, franchisees are obligated to pay the then-current DB Software Fee, which currently ranges from $225 to $300 per month. The CR Software Fee is also due monthly. These technology-related fees are ongoing financial obligations for franchisees operating under an Extreme Art Rider. These fees are in addition to any other fees or costs associated with operating the Extreme Art Studio Business, such as royalties, marketing fees, and rent.