Is updating operating assets a requirement for Extreme Art Studio franchise renewal?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
- 13.1.2 When this Franchise Agreement expires you have the option to acquire a successor franchise commencing immediately upon the expiration of this Franchise Agreement, if:
- (a) you (and each of your owners) have substantially complied with this Franchise Agreement during its term;
- (b) you (and each of your owners) are, both on the date you give us written notice of your election to acquire a successor franchise (as provided in Section 13.2 below) and on the date on which the term of the successor franchise would commence, in full compliance with this Franchise Agreement and all System Standards;
- (c) you add, update, or replace Operating Assets (if necessary) at our request;
- (d) you pay us a successor franchise fee for each successor Extreme Art Studio Business being renewed, in the amount of ten percent (10%) of our then-current Initial Franchise Fee for new franchises (or if we are not offering Franchises at the time of your renewal, the successor franchise fee shall be ten percent (10%) of the initial franchise fee listed in our most recent franchise disclosure document); and
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to Extreme Art Studio's 2024 Franchise Disclosure Document, updating operating assets may be a requirement for franchise renewal. To qualify for a successor franchise agreement with Extreme Art Studio, a franchisee may need to add, update, or replace operating assets at the request of the franchisor.
To obtain a successor franchise, the franchisee must meet several conditions, including compliance with the existing Franchise Agreement and System Standards. They must also pay a successor franchise fee equal to ten percent of the then-current Initial Franchise Fee for new franchises. If Extreme Art Studio is not offering franchises at the time of renewal, the successor franchise fee will be ten percent of the initial franchise fee listed in the most recent franchise disclosure document.
Extreme Art Studio also retains the right to specify improvements, technology upgrades, trade dress updates, and/or modifications required to bring the Operating Assets of the Franchised Business into compliance with then-applicable System Standards for new Extreme Art Studio Businesses. The franchisor will also state the actions the franchisee must take to correct operating deficiencies and the time period in which they must be corrected. If the franchisee fails to cure these deficiencies, Extreme Art Studio can deny the successor franchise, providing at least 90 days' notice before the Franchise Agreement expires.