What happens if the lease for the Apricot Lane premises is terminated due to the franchisee's actions?
Apricot_Lane Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event that (i) Tenant defaults in the performance of its obligations under that certain Franchise Agreement by and between Tenant and Franchisor such that the Franchise Agreement is terminated, or (ii) Tenant defaults under this Lease beyond any notice and cure period, Franchisor shall have the right, but not the obligation, to assume from Tenant all of the obligations of Tenant under the Lease without Landlord's or Tenant's approval, provided, however, that Franchisor delivers to Landlord written notice of its assumption of the Lease within 30 days of Franchisors written notice of Tenant default. Upon such assumption, Franchisor agrees to be bound by the terms, conditions and covenants of the Lease. Franchisor shall then have the right, with Landlord's consent which consent shall not be unreasonably withheld, conditioned or delayed, to assign this Lease to a bona-fide and qualified franchisee of Franchisor, provided that the following conditions are met:
- (i) Franchisor shall deliver to Landlord not less than 30 days' prior written notice of such assignment;
- (ii) at the time of any such assignment, Franchisor shall not be in default under this Lease;
- (iii) the franchisee meets all of the standard criteria applicable to Franchisor's franchisees generally;
- (iv) the franchisee shall be contractually obligated to operate the Premises under the same Trade Name and for the same Permitted Use specified in this Lease and in all other respects as required by this Lease;
- (v) the franchisee shall not be reasonably denied, and
- (vi) if the franchisee defaults under the provisions of its franchise agreement with Franchisor or under this Lease, Franchisor shall have the right, but not the obligation, to take possession of the Premises and cause the Premises to be continuously operated as required by this Lease notwithstanding such default until such time as the Premises are assigned to another franchisee, in which event all of the terms and provisions set forth herein shall be applicable to such assignment.
Source: Item 23 — RECEIPTS (FDD pages 51–222)
What This Means (2025 FDD)
According to Apricot Lane's 2025 Franchise Disclosure Document, if a franchisee defaults under the lease agreement beyond any notice and cure period, Apricot Lane has the right, but not the obligation, to assume all of the franchisee's obligations under the lease without needing approval from the landlord or the franchisee. Apricot Lane must provide written notice of its assumption of the lease within 30 days of its written notice of the franchisee's default. If Apricot Lane assumes the lease, it agrees to be bound by its terms, conditions, and covenants.
Following the assumption of the lease, Apricot Lane has the right, with the landlord's consent (which cannot be unreasonably withheld, conditioned, or delayed), to assign the lease to another qualified Apricot Lane franchisee. To do so, Apricot Lane must provide the landlord with at least 30 days' prior written notice of the assignment. At the time of assignment, Apricot Lane must not be in default under the lease, and the new franchisee must meet Apricot Lane's standard criteria for franchisees. The new franchisee must also be contractually obligated to operate the premises under the same trade name and for the same permitted use as specified in the original lease.
Furthermore, if the new franchisee defaults under their franchise agreement with Apricot Lane or under the lease, Apricot Lane has the right, but not the obligation, to take possession of the premises and ensure it continues to operate as required by the lease. This continues until the premises are assigned to yet another franchisee, at which point all the terms and provisions apply to that subsequent assignment. This clause ensures that Apricot Lane can maintain control over the location and brand presence even if a franchisee fails to meet their obligations.