What events allow Anago's Assignee to assume the Lease and occupy the Premises?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon: (a) the declaration of an Event of Default by Assignor under the SRA, (b) the expiration of the SRA, (c) termination of the SRA by Assignee for cause, or (d) an expression by Assignor of its desire to terminate the Lease, Assignee may, at its option, upon written notice to Landlord and Assignor, assume the Lease and occupy the Premises.
Upon exercise of this option, Assignee shall be deemed to be substituted as the tenant under the Lease in the place and stead of Assignor and shall be deemed to have assumed expressly all of the terms, covenants and obligations of the Lease therefore applicable to Assignor which arise after Assignee's assumption of the Lease and shall likewise be entitled to enjoy all of the rights and privileges granted to Assignor under the terms and conditions of the Lease.
Notwithstanding the foregoing, in the event Assignee exercises its rights under this paragraph 2, Assignor shall remain obligated under the Lease.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, the Assignee, which appears to be Anago itself or a related entity, can assume the lease and occupy the premises under specific conditions. These conditions include (a) the declaration of an Event of Default by the Assignor (the franchisee) under the SRA (Subfranchise Rights Agreement), (b) the expiration of the SRA, (c) termination of the SRA by Anago for cause, or (d) an expression by the Assignor of its desire to terminate the Lease.
Upon the occurrence of any of these events, Anago, as the Assignee, has the option to take over the lease by providing written notice to both the landlord and the Assignor. Once this option is exercised, Anago is considered the tenant in place of the Assignor and assumes all obligations of the lease that arise after the assumption. Anago also gains all rights and privileges granted to the Assignor under the lease terms.
It is important to note that even if Anago exercises its right to assume the lease, the original Assignor (the franchisee) remains obligated under the lease. This means that the franchisee could potentially be held liable for lease obligations even after Anago has taken over the premises. This clause likely protects Anago's interests by ensuring they have recourse against the franchisee even after taking over the lease, while also providing the landlord with continued assurance of payment.
This arrangement is a significant consideration for prospective Anago franchisees. It highlights the importance of understanding the terms of the SRA and the potential consequences of defaulting under that agreement. Franchisees should carefully evaluate their ability to meet the obligations of the SRA to avoid triggering events that could lead to Anago assuming the lease and potentially leaving the franchisee with ongoing liabilities.