What is the dependency between the execution of Franchise Agreements and the expiration of the Face Foundrie Area Development Agreement?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section(s) in | Summary | |
|---|---|---|---|
| Area Development Agreement | rights or obligations under the Area Development Agreement, or any material asset of your business, without our prior written consent, which shall be subject to all of the conditions and requirements for transfers set forth in the Franchise Agreement executed simultaneously with the Area Development Agreement that we deem applicable to a proposed transfer under the Area Development Agreement. | ||
| (l) Franchisor approval | Section 7.2 | We have the right to approve transfers. | |
| of transfer by area | |||
| developer | |||
| (m) Conditions for franchisor’s approval of transfer | Sections 7.2 and 7.3 | Unless waived, a transfer of the Area Development Agreement is conditioned on, among other factors, the requirement that the proposed transfer of the Area Development Agreement be made in conjunction with a simultaneous transfer of all existing Franchise Agreements to the same approved transferee. Additionally, your first Facial Bar under your first Franchise Agreement must be open and operating. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION OF THE FRANCHISE RELATIONSHIP (FDD pages 51–59)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, a transfer of the Area Development Agreement is dependent on certain conditions. Specifically, the transfer must occur alongside a simultaneous transfer of all existing Franchise Agreements to the same approved transferee. This means that if an area developer wants to transfer their development rights, they must also transfer all of their existing Face Foundrie franchise agreements to the same party.
Furthermore, Face Foundrie stipulates that the first Facial Bar under the initial Franchise Agreement must be open and operating. This condition ensures that the area developer has successfully launched at least one location before transferring the Area Development Agreement. This requirement likely aims to protect the brand and ensure that new area developers are taking over established, operational businesses rather than undeveloped territories.
In practical terms, this means a potential franchisee looking to acquire an Area Development Agreement must also be prepared to take on all existing franchise agreements within that area and ensure the first location is already up and running. This could represent a significant financial commitment and operational responsibility, as the franchisee would be immediately responsible for multiple locations rather than starting with a single unit. Prospective franchisees should carefully evaluate the performance and obligations of all existing franchises before agreeing to such a transfer.