Under what circumstances can the Extreme Art Studio franchise agreement be modified?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in Franchise Agreement and Multi-Franchise Addendum | Summary | |
|---|---|---|---|
| (m) | Conditions for franchisor approval of transfer | Section 12.3 | Written notice; provide us opportunity to exercise right of first refusal; transferee qualifies; you are not in default; transferee is not a direct competitor; landlord consents to assignment of lease for your Studio; we approve terms of transfer; subordinate; transferor and owners sign non-competition agreement; payment of transfer fee; transferor signs general release; transferee signs successor franchise agreement; refurbish Extreme Art Studio Business; transferee successfully completes training program; reimbursement of broker fees, if any; and others. |
| (n) | Franchisor's right of first refusal to acquire franchisee's business | Section 12.6 | We have a 30-day right of first refusal and can match offers. |
| (o) | Franchisor's option to purchase franchisee's business | Not applicable | Upon expiration or termination, we can buy all or part of your assets. |
| (p) | Death or disability of franchisee | Section 12.7 | Upon death or disability of you (or your Operating Owner), your (or your Operating Owner's) executor or personal representative must transfer the ownership interest within six months of date of death or disability. We may appoint an interim manager to operate your Extreme Art Studio Business during the transfer. |
| (q) | Non-competition covenants during the term of the franchise | Section 7 | No ownership interest in or performing services for a competitive business located anywhere; no interference with our or our affiliates or franchisees' relationships with any Extreme Art customers, vendors, or clients; and no engagement in any other activity injuring the goodwill of the Marks and the System, subject to applicable state law. |
| (r) | Non-competition covenants after the franchise is terminated or expires | Sections 15.4 and 15.5 | Prohibitions on diverting business to competitors; involvement in any competing business for two years and: (a) within a 25-mile radius of each Extreme Art Studio Business that you operate under this Franchise Agreement; and (b) within a 25-mile radius of any other Extreme Art Studio Business that is either open or under development as of the date of termination or expiration of this Franchise Agreement, subject to applicable state law. |
| (s) | Modification of the agreement | Section 17.11 | No modification unless by written agreement of both parties, but Franchise Operations Manual and System Standards subject to change. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 43–46)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio Franchise Disclosure Document, the franchise agreement can only be modified through a written agreement signed by both Extreme Art Studio and the franchisee. This requirement ensures that any changes to the original contract are mutually agreed upon and documented, protecting both parties' interests.
However, the Franchise Operations Manual and System Standards are subject to change by Extreme Art Studio. This means that while the core franchise agreement requires mutual consent for modifications, Extreme Art Studio retains the right to update operational procedures and standards outlined in these separate documents. Franchisees must stay informed of these changes, as they are obligated to adhere to the most current version of the manual and standards.
This flexibility for Extreme Art Studio to modify the Franchise Operations Manual and System Standards is common in franchising, allowing the franchisor to adapt to changing market conditions, improve operational efficiency, and maintain brand consistency across all locations. Prospective franchisees should carefully review the scope of these manuals and standards to understand the potential for unilateral changes by Extreme Art Studio during the franchise term.