Common use of Initial and Renewal Terms Clause in Contracts

Initial and Renewal Terms. The initial term of this Agreement (the “Initial Term”), except as otherwise provided in this Agreement, shall commence upon its execution by Franchisor, and shall automatically expire five (5) years from the date Franchisee commences operations of the Franchised Business, unless sooner terminated under the terms of this Agreement. Upon the expiration of the Initial Term, Franchisee shall have the right (the “Renewal Right”) to enter into a new franchise agreement in the form then generally being offered to prospective Fiesta franchisees (the “Renewal Franchise Agreement”) for a five (5) year period (the “Renewal Term”), which Renewal Franchise Agreement shall likewise grant Franchisee the right to enter into one additional franchise agreement in the form then generally being offered to prospective Fiesta franchisees (the “Extension Franchise Agreement”) for a five (5) year period (the “Extension Term”). “Term” means the Initial Term, the Renewal Term and the Extension Term of this Agreement. Franchisee acknowledges that the Commissions and other fees payable to Franchisor during the Renewal Term and Extension Term shall be at the rates then applicable to new franchisees. The term of the Renewal Franchise Agreement and Extension Franchise Agreement, as applicable, shall commence upon the date of the expiration of the Initial Term or the Renewal Term, as applicable; provided, however, that Franchisee comply with each of the conditions for renewal described in Sections 2.2 through 2.4 of this Agreement.