What is the initial term of both the Focus Cfo franchise and license agreement?
Focus_Cfo Franchise · 2025 FDDAnswer from 2025 FDD Document
The sale of a franchise is under a franchise agreement entered into between the Area President franchisee and the Company. The sale of a license is under a license agreement entered into between the CFO licensee and the Company. The fee under both of these agreements is due upon signing the agreement. The fee may be fully or partially refundable based on certain criteria set forth in the agreement. The fee in both agreements is comprised of two components: a training fee and an initial franchise/license fee. The initial term of both the franchise and license agreement is ten years. Franchisees and licensees have the option to renew their agreement at the end of the initial term based on meeting certain criteria as set forth in the agreement and executing the then-current franchise or license agreement. The Company has determined that there are two performance obligations in both the franchise and license agreement which are 1) providing the initial training program for new franchisees/licensees and 2) ongoing support of the FocusCFO System and FocusCFO Resources during the term of the agreement. The Company recognizes revenue from the sale of a franchise or license in two stages. The initial training program is made available to the franchisees/licensees within two days of executing their agreement; therefore, the training fee is recognized once the training program has been provided to the franchisee/licensee. Support for the FocusCFO System and FocusCFO Resources is provided throughout the ten-year agreement term, therefore, the initial franchise/license fee is recognized as revenue over the duration of the agreement.
Source: Item 23 — Receipts (FDD pages 37–126)
What This Means (2025 FDD)
According to the 2025 Focus Cfo Franchise Disclosure Document, the initial term for both the franchise agreement and the license agreement is ten years. This means that upon signing either agreement, the franchisee or licensee is granted the rights and obligations defined within that agreement for a decade, unless the agreement is terminated earlier according to its terms.
For a prospective Focus Cfo franchisee, this ten-year term represents a significant commitment. It is a considerable period during which the franchisee will be expected to build and operate their business according to the Focus Cfo system. The franchisee should carefully consider whether they are prepared to dedicate themselves to this business model for that length of time.
At the end of the initial term, both franchisees and licensees have the option to renew their agreements, provided they meet certain criteria and execute the then-current agreement. This renewal option provides an opportunity for both parties to reassess their relationship and the terms under which they will continue to operate. The specific renewal criteria are detailed within the franchise and license agreements and should be carefully reviewed by any prospective franchisee or licensee.