Are there any financial thresholds mentioned in the Extreme Art Rider for Extreme Art Studio?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
ee are currently due and payable 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 Busine
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio Franchise Disclosure Document, several financial thresholds are 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 must pay an "Opening Extension Fee" of $1,000 per month until the business opens or the agreement is terminated. Failure to pay this fee constitutes a non-curable default, potentially leading to termination of the Extreme Art Rider.
In addition to the opening extension fee, 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 a $500 fee to implement class registration software (CR Software). These implementation fees are payable upon execution of the Extreme Art Rider and are nonrefundable.
These financial obligations highlight the importance of careful planning and timely execution for Extreme Art Studio franchisees. Failing to meet the opening deadline can result in significant additional costs, and the initial software implementation fees represent a notable upfront investment. Prospective franchisees should carefully consider these costs and ensure they have sufficient capital and resources to meet these requirements.