What are the two options 1 800 Packouts has if the tenant defaults on the lease?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event Tenant fails to cure any default within the time required in the Lease, Landlord shall promptly give written notice to PACKOUTS specifying the nature of Tenant's defaults and granting PACKOUTS an additional thirty (30) days from the date PACKOUTS receives such notice to exercise its right, in PACKOUTS's sole discretion, to either (a) accept an assignment of the Lease upon the same terms (including all renewals) as apply to this Rider; or (b) assign the Lease to an authorized franchisee of PACKOUTS (provided that such franchisee shall be required to execute any such documentation as required by Landlord).
The Tenant shall be and remain liable to the Landlord for all of its obligations under the Lease, notwithstanding any assignment of the Lease to PACKOUTS or to an authorized franchisee.
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to the 2025 FDD, if a 1 800 Packouts tenant defaults on their lease, the landlord must notify 1 800 Packouts and provide them with 30 days to exercise one of two options. These options allow 1 800 Packouts to maintain control over the location and ensure continued operation of a franchise at that site.
The first option is for 1 800 Packouts to accept an assignment of the lease under the same terms, including all renewals, as the original lease. This means 1 800 Packouts would step into the shoes of the original tenant and assume responsibility for the lease obligations. The second option is for 1 800 Packouts to assign the lease to an authorized franchisee, provided that the franchisee executes any required documentation by the landlord. This allows 1 800 Packouts to place a new franchisee in the location without disrupting business operations.
It is important to note that the original tenant remains liable to the landlord for all obligations under the lease, even if the lease is assigned to 1 800 Packouts or another franchisee. This clause protects the landlord's interests in the event of default. These options provide 1 800 Packouts with flexibility in managing lease situations and ensuring the continued operation of its franchises.