Under what conditions does a Face Foundrie franchisee have the right to acquire a successor franchise?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
which Franchisor is an approved supplier to Franchisee, until such time as Franchisee corrects the breach.
14.05 Franchisor's Cure Right.
If Franchisee breaches any provision of this Agreement, Franchisor shall have the right, but not the obligation, to take such action as Franchisor deems appropriate to cure the breach. Franchisee shall reimburse Franchisor on demand for all costs and expenses incurred by Franchisor in connection with such cure or attempt to cure.
15. RENEWAL RIGHTS.
15.01 Right To Acquire a Successor Franchise. Franchisee has the right, subject to the conditions contained in this Section 15, to acquire a successor franchise for the Facial Bar for one (1) additional ten (10) year term on the terms and conditions of the then-current form of franchise agreement for Face Foundrié Facial Bars, if upon expiration of the applicable Term: (a) Franchisee and its Owners and Affiliates are in compliance with this Agreement and any other agreements with Franchisor or any of its Affiliates, and Franchisee and its Owners have been in substantial compliance with this Agreement throughout the Term; (b) Franchisor has not notified Franchisee of its decision that any federal or applicable state legislation, regulation or rule, which is enacted, promulgated or amended after the date hereof, may have an adverse effect on Franchisor's rights, remedies or discretion in franchising Face Foundrié Facial Bars such that it creates an
unreasonable or overly burdensome requirement on Franchisor's ability to continue to offer franchises in such location; and (c) the following additional conditions have been met: (i) Franchisee maintains the right to possession of the Premises for the term of the successor franchise agreement; (ii) Franchisee maintains all permits and licenses necessary to operate the Facial Bar; (iii) Franchisee is current in all obligations to Franchisor and its Affiliates, and System lessors, vendors and suppliers; and (iv) if required by Franchisor, Franchisee enters into an agreement with Franchisor whereby Franchisee agrees within a specified time period (not to exceed six (6) months), to send required personnel, at Franchisee's expense, to such training programs established and required by Franchisor. Upon the exercise of the right to acquire a successor franchise, Franchisee shall pay to Franchisor at the time of renewal a renewal fee equal to 25% of the then current initial franchise fee.
Franchisee's acquisition of a successor franchise is further conditioned on Franchisee refurbishing the premises of the Facial Bar at Franchisee's expense to conform the Facial Bar to the then-current image for new Face Foundrié Facial Bars, including, without limitation, with respect to trade dress, color schemes and presentation of the Marks ("Refurbishments"). Refurbishments may include structural changes, installation of new equipment and signs, remodeling, redecoration and modifications to existing improvements. Refurbishments are intended to be large-scale re-equipping, refurbishing and remodeling of the Facial Bar, and nothing contained in this Section 15.01 will limit Franchisee's other obligations under this Agreement or the Operations Manual.
- 15.02 Notices. Franchisee must give Franchisor written notice of its desire to acquire a successor franchise not less than six (6) months nor more than nine (9) months prior to the expiration of this Agreement. Notwithstanding any notice or communication of Franchisor to Franchisee that Franchisee has the right to acquire a successor franchise for the Facial Bar, Franchisee's right will be subject to its continued compliance with all the provisions of this Agreement up to the date of its expiration. The written notice must include a plan to Franchisor outlining the Refurbishments that Franchisee plans to undertake prior to the expiration of this Agreement. Each such plan must be approved by Franchisor prior to Franchisee commencing any Refurbishments.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, a franchisee has the right to acquire a successor franchise for an additional ten-year term if they meet specific conditions. These conditions include compliance with the existing Franchise Agreement and other agreements with Face Foundrie or its affiliates. Substantial compliance with the agreement throughout the initial term is also required. Face Foundrie must not have determined that any new or amended legislation or regulations would adversely affect its ability to offer franchises in the franchisee's location, creating unreasonable burdens.
Additional conditions include maintaining the right to possess the premises for the successor franchise term and holding all necessary permits and licenses to operate the Face Foundrie Facial Bar. The franchisee must be current on all financial obligations to Face Foundrie, its affiliates, system lessors, vendors, and suppliers. If required by Face Foundrie, the franchisee must also agree to send personnel to required training programs at the franchisee's expense within a specified timeframe, not exceeding six months.
To exercise the right to acquire a successor franchise, the franchisee must provide written notice to Face Foundrie between six and nine months before the expiration of the current agreement. This notice must include a plan outlining any refurbishments the franchisee intends to undertake, which requires Face Foundrie's approval. Upon exercising the right, the franchisee must pay a renewal fee equal to 25% of the then-current initial franchise fee. The franchisee and its owners will also need to execute Face Foundrie’s current form of franchise agreement and ancillary agreements, including personal guarantees, and provide general releases of claims against Face Foundrie. Failure to sign these agreements and releases within 30 days of delivery is considered an election not to acquire a successor franchise.
It is important to note that the new franchise agreement may contain provisions, including royalty fees, that are materially different from the original agreement. The grant of any successor franchise is conditional upon meeting all the outlined conditions. If a franchisee fails to meet these conditions, the original franchise will automatically expire at the end of its term.