Under what circumstances must revised Attachments C be submitted to Extreme Art Studio?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
Owner ceases to own at least a fifty-one percent (51%) ownership interest in you, you must deliver to us a revised Attachment C to accurately identify the Operating Owner for our review and approval, as otherwise required by this Franchise Agreement; and
1.3.6 The Operating Owner is authorized to deal with us on your behalf in respect of all matters whatsoever which may arise in respect of this Franchise Agreement, and any decision made by the Operating Owner will be final and binding upon you. We will be entitled to rely solely upon the decision of the Operating Owner in any such dealings without the necessity of any discussions with any other party named in this Franchise Agreement, and we will not be held liable for any actions taken by you or otherwise, based upon any decision or actions of the Operating Owner.
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio Franchise Disclosure Document, a franchisee must submit a revised Attachment C to Extreme Art Studio for review and approval if the owner ceases to own at least 51% ownership interest in the franchise.
This requirement ensures that Extreme Art Studio is aware of any changes in the controlling ownership of the franchise. Attachment C likely identifies the Operating Owner, who is authorized to deal with Extreme Art Studio on behalf of the franchisee. This provision allows Extreme Art Studio to rely solely on the decisions of the Operating Owner without needing to consult with other parties named in the Franchise Agreement.
The stipulation that the owner must maintain at least 51% ownership ensures a level of continuity and commitment from the original franchisee. If the ownership falls below this threshold, Extreme Art Studio requires an updated Attachment C to identify the new Operating Owner and maintain clear lines of communication and decision-making authority. This protects Extreme Art Studio from potential disputes or miscommunications arising from unclear ownership structures.