What is the purpose of the Collateral Assignment of Lease for an Amorino franchise?
Amorino Franchise · 2025 FDDAnswer from 2025 FDD Document
| THIS COLLATERAL ASSIGNMENT OF LEASE (this "Assignment") is entered into as of, |
|---|
| 20, between("Franchisee") |
| and |
| CPUSA, LLC, a |
| Delaware limited liability |
| company ("Franchisor") |
| Subject to the provisions hereof, Franchisee, to secure its obligations to the Franchisor under |
| the franchise agreement between the Franchisor and Franchisee for the operation of an Amorino |
| Store or Outlet, dated, 20 (the "Franchise Agreement") and under every |
| agreement between Franchisee and the Franchisor, hereby assigns, transfers and sets over unto |
| Franchisor and/or such person(s)/entity(ies) as Franchisor may from time-to-time designate all of |
| Franchisee's right, title and interest, whether as tenant or otherwise, in, to and under that certain |
| lease (the "Lease"), a copy is attached to this Assignment, dated, 20, between |
| Franchisee and ("Landlord"), respecting |
| that property commonly known as |
| (the "Premises"). The Franchisor shall have no liabilities or obligations of any kind arising from, |
| or in connection with, this Assignment, the Lease or otherwise (including, but not limited to, any |
| obligation to pay rent and/or other amounts) until and unless |
| the Franchisor, at the Franchisor's |
| option and in its sole discretion, takes possession of the Premises pursuant to the terms hereof and |
| expressly (and in writing) assumes the rights and obligations of Franchisee under the Lease. The |
| Franchisor is only responsible for those obligations accruing after the date of such assumption. |
Source: Item 22 — CONTRACTS (FDD pages 80–81)
What This Means (2025 FDD)
According to Amorino's 2025 Franchise Disclosure Document, the Collateral Assignment of Lease serves to secure the franchisee's obligations to Amorino under the franchise agreement. This legal document assigns the franchisee's rights and interests in the lease to Amorino, allowing Amorino to step in and take over the lease under certain conditions.
Specifically, the Collateral Assignment of Lease allows Amorino to take possession of the premises and operate the Franchised Business without needing the landlord's consent if the franchisee defaults under the lease or franchise agreement, or if the agreement expires or terminates. However, Amorino is not liable for any obligations under the lease until they take possession of the premises and expressly assume the franchisee's obligations in writing, at which point Amorino becomes responsible for obligations accruing after that assumption date.
Furthermore, Amorino requires that the franchisee use commercially reasonable efforts to have their lessor agree to the Collateral Assignment of Lease. If the franchisee is unsuccessful, Amorino reserves the right to contact the lessor directly to get the document signed or to modify it as needed. The fully signed Lease and Collateral Lease Assignment, if obtained, must be completed by the Site Selection Date.