What Is FDD Item 17 and Why Is It Critical for Sport Clips Franchisees?

Item 17 of the Franchise Disclosure Document is titled “Renewal, Termination, Transfer, and Dispute Resolution.” The FTC Franchise Rule (16 C.F.R. Part 436) requires every franchisor to disclose the key terms of the franchise agreement that govern these four areas. Item 17 is presented in a standardized table format summarizing 23 specific provisions.

For Sport Clips franchisees, Item 17 is critically important because it defines what happens at every stage of the franchise relationship: when the agreement expires, when you want to sell, when you have a dispute, and when things go wrong. These are the terms that determine your exit options and your risk exposure.

What Is the Initial Term of a Sport Clips Franchise Agreement?

The Sport Clips franchise agreement has an initial term of 10 years. This is the period during which you have the right to operate the franchise under the terms of the agreement you signed. The initial term begins on the date the franchise agreement is executed.

Renewal Terms and Conditions

Sport Clips offers renewal terms of Additional 10-year terms, subject to conditions. The renewal fee is $5,000 (fewer than 3 salons), $3,500 (3+ salons). However, renewal is not automatic. The franchisee must typically meet several conditions including being in good standing, having no uncured defaults, executing the then-current form of franchise agreement (which may have materially different terms), paying the renewal fee, and completing any required facility upgrades.

The requirement to sign the “then-current” franchise agreement at renewal means the terms you agreed to initially may change. The royalty rate, technology requirements, and operating standards could all be different at renewal.

What Are the Grounds for Termination?

Standard franchise defaults including failure to pay fees, failure to maintain standards, abandonment, bankruptcy, and conviction of felony. Cure periods apply to most defaults.

The distinction between termination with a cure period and immediate termination is critical. Defaults that allow a cure period (typically 30 to 60 days) give you an opportunity to correct the problem. Immediate termination defaults, typically reserved for bankruptcy, felony conviction, abandonment, and unauthorized transfer, provide no second chance.

How Do Transfers Work Under the Sport Clips Franchise Agreement?

If you want to sell your Sport Clips franchise, you must comply with the transfer provisions in the franchise agreement. The transfer fee is $5,000 for first store, $1,000 each additional in same transaction. No charge for transfer to a corporation you control.. Transfers require the franchisor’s prior written consent and are subject to conditions including buyer qualification, buyer completion of training, and the buyer’s execution of the then-current franchise agreement.

The franchisor likely holds a right of first refusal (ROFR), which allows it to purchase the franchise on the same terms offered by a third-party buyer. The ROFR can complicate the sales process because potential buyers may be discouraged from making offers knowing the franchisor can step in. For a deeper look at franchise transfer options, see our franchise exit audit resources.

What Are the Post-Termination Obligations?

When a Sport Clips franchise agreement terminates or expires without renewal, the franchisee faces post-termination obligations including immediate cessation of trademark use, de-identification of premises, compliance with a non-compete covenant (Post-termination non-compete restricting competing businesses within a defined radius for a specified period.), return of proprietary materials, and payment of all outstanding obligations.

The non-compete provision is particularly important. It restricts what you can do after the franchise relationship ends and can effectively prevent you from using the skills and relationships you built during the franchise term to compete in the same industry. For more on evaluating these provisions, see our guide on franchise agreement red flags.

How Does Dispute Resolution Work?

Arbitration or litigation in a specified jurisdiction, likely Texas (Sport Clips headquarters).

Key dispute resolution terms to evaluate include the required venue, governing law, jury trial waivers, class action waivers, and any mandatory mediation or arbitration requirements. The venue provision is important because resolving a dispute in the franchisor’s home jurisdiction increases your costs if you operate in a different state.

What Should Prospective Sport Clips Franchisees Focus on in Item 17?

• Total commitment duration: Calculate the total possible duration (initial term plus renewal). Model your investment over this full period.
• Renewal conditions: Understand the total cost of renewal, including fees and facility upgrades. Determine whether the then-current terms at renewal could change your economics.
• Transfer process: Evaluate the transfer fee, ROFR, and buyer qualification requirements. These affect the marketability and value of your franchise when you want to exit.
• Non-compete scope: Assess whether the post-termination non-compete is reasonable and what it would mean for your career if the franchise relationship ended.
• Dispute resolution venue: Determine where disputes must be resolved and factor the cost into your risk assessment.

At Lopes Law LLC, we review franchise FDDs and agreements regularly. Our flat-fee FDD validation review is $3,000 and covers all 23 items. For a complete overview, see our guide on what to expect from an FDD review.

Frequently Asked Questions About Sport Clips FDD Item 17

Reach out, we are friendly. Call now for a free consultation at (267) 777-9117 or schedule your free 20-minute consultation online.

Last updated: March 12, 2026