Does Extreme Art Studio waive its rights by accepting payments after a breach of the Franchise Agreement?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
- 17.2.2 We and you will not waive or impair any right, power or option this Franchise Agreement reserves (including, without limitation, our right to demand exact compliance with every term, condition and covenant, or to declare any breach to be a default, and to terminate this Franchise Agreement before its term expires) because of any custom or practice at variance with this Franchise Agreement's terms; our or your failure, refusal or neglect to exercise any right under this Franchise Agreement, or to insist upon the other's compliance with this Franchise Agreement, including, without limitation, any System Standard; our waiver of or failure to exercise any right, power or option, whether of the same, similar, or different nature, with other Extreme Art Studio Businesses; the existence of franchise agreements for other Extreme Art Studio Businesses which contain provisions different from those contained in this Franchise Agreement; or our acceptance of any payments due from you after any breach of this Franchise Agreement.
No special or restrictive legend or endorsement on any check or similar item given to us will be a waiver, compromise, settlement or accord and satisfaction.
We are authorized to remove any legend or endorsement, which then will have no effect.
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to Extreme Art Studio's 2024 Franchise Disclosure Document, Extreme Art Studio does not waive or impair any right, power, or option reserved in the Franchise Agreement due to accepting payments from the franchisee after a breach of the agreement. This means that even if Extreme Art Studio continues to accept royalty payments or other fees from a franchisee who is in violation of the Franchise Agreement, Extreme Art Studio still retains the right to enforce the terms of the agreement and pursue remedies for the breach.
This provision protects Extreme Art Studio's ability to address breaches of the Franchise Agreement without inadvertently relinquishing its rights. For a prospective franchisee, this means that simply continuing to make payments will not excuse any violations of the agreement. Extreme Art Studio can still demand full compliance with all terms and conditions, declare a breach to be a default, and even terminate the Franchise Agreement despite accepting payments.
Franchisees should be aware that any special endorsements on checks or other payment items will not be considered a waiver, compromise, or settlement. Extreme Art Studio is authorized to remove any such endorsements, which will then have no effect. This underscores the importance of addressing any disputes or breaches directly with Extreme Art Studio through formal written communication rather than attempting to use payment mechanisms to negotiate or resolve issues unilaterally.
This type of clause is relatively standard in franchise agreements, as it protects the franchisor's right to enforce the agreement's terms. Franchisees should ensure they understand all obligations under the Franchise Agreement and maintain open communication with Extreme Art Studio to address any potential issues proactively.