Does All States M.E.D. Franchising, LLC have an obligation to cure any default under the lease if the tenant fails to do so?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
Phone Number: | | |
| Franchisor | All States M.E.D. Franchising, LLC |
|---|---|
| Name: | |
| Franchisor | 6157 NW 167th Street, Suite F15 |
| Address: | Miami Lakes, FL 33015 |
| Franchisor Phone Number: | 877-255-1699 |
| Tenant | |
| ----------------------------- | -- |
| Tenant Name: | |
| Address of Leased Premises: | |
| Date of Lease: |
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- Use. Tenant is a franchisee of Franchisor. The Leased Premises shall be used only for the operation of an All States M.E.D. business (or any name authorized by Franchisor).
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- Notice of Default and Opportunity To Cure. Landlord shall provide Franchisor with copies of any written notice of default ("Default") given to Tenant under the Lease, and Landlord grants to Franchisor the option (but not the obligation) to cure any Default under the Lease (should Tenant fail to do so) within 10 days after the expiration of the period in which Tenant may cure the Default.
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- Termination of Lease. Landlord shall copy Franchisor on any notice of termination of the Lease. If Landlord terminates the Lease for Tenant's Default, Franchisor shall have the option to enter into a new Lease with Landlord on the same terms and conditions as the terminated Lease, subject to Landlord's approval in its reasonable discretion. To exercise this option, Franchisor must notify Landlord within 10 days after Franchisor receives notice of the termination of the Lease.
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- Termination of Franchise Agreement. If the Franchise Agreement between Franchisor and Tenant is terminated during the term of the Lease, then upon the written request of Franchisor, Landlord and Tenant consent to allow Franchisor to assume any existing term of the Lease (the "Assumption"), provided that any and all defaults have been cured and all payments due under the Lease are current, and to enter into a written agreement providing for such Assumption.
Source: Item 23 — RECEIPTS (FDD pages 44–174)
What This Means (2024 FDD)
According to All States M.E.D.'s 2024 Franchise Disclosure Document, the landlord must provide All States M.E.D. with copies of any default notices given to the tenant (the franchisee). All States M.E.D. has the option, but not the obligation, to cure any default under the lease if the franchisee fails to do so. This cure can be executed within 10 days after the expiration of the period in which the tenant may cure the default.
This clause protects All States M.E.D. by giving them the ability to step in and remedy a franchisee's default on the lease. This prevents potential damage to the brand and continued operation of the location. However, it is important to note that All States M.E.D. is not required to cure the default. The landlord must also copy All States M.E.D. on any lease termination notices. If the lease is terminated due to the franchisee's default, All States M.E.D. has the option to enter into a new lease with the landlord under the same terms and conditions as the original lease, subject to the landlord's approval. To exercise this option, All States M.E.D. must notify the landlord within 10 days of receiving the termination notice.
Furthermore, if the Franchise Agreement between All States M.E.D. and the franchisee is terminated during the lease term, All States M.E.D. can assume the existing lease term, provided all defaults are cured and payments are current. In this scenario, the landlord will provide All States M.E.D. with possession of the leased premises, free of any rights of the former franchisee. All States M.E.D. also has the right to assign its interest in the lease or sublet the premises to another franchisee, subject to the landlord's reasonable consent.
By executing the lease addendum, All States M.E.D. does not assume any liability with respect to the leased premises or any obligation as the tenant under the lease. This addendum outlines the rights and options available to All States M.E.D. in the event of a default or termination, without placing any mandatory obligations on them to cover the franchisee's lease obligations.