Under what conditions can Apricot Lane take possession of the premises if a franchisee defaults?
Apricot_Lane Franchise · 2025 FDDAnswer from 2025 FDD Document
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; and
- (v) the franchisee shall not be unreasonably denied.
Notwithstanding any assignment made pursuant to this Section, Tenant shall not be released from any liability for the payment of rent or other sums due under the Lease, or from the performance of any of the obligations and covenants of the Lease.
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.
Upon an assignment by Franchisor to a franchisee other than Tenant as provided above, Franchisor shall be released from any and all liabilities under this Lease.
Source: Item 23 — RECEIPTS (FDD pages 51–222)
What This Means (2025 FDD)
According to Apricot Lane's 2025 Franchise Disclosure Document, Apricot Lane has the right to take possession of the premises under specific conditions related to franchisee default. If a franchisee defaults under their franchise agreement, leading to its termination, or if the franchisee defaults under the lease agreement beyond any applicable notice and cure period, Apricot Lane has the option, but not the obligation, to assume the franchisee's obligations under the lease. To do so, Apricot Lane must provide written notice to the landlord within 30 days of notifying the franchisee of the default.
Upon assuming the lease, Apricot Lane can then assign the lease to another qualified franchisee, subject to the landlord's consent, which cannot be unreasonably withheld. Several conditions must be met for this assignment: Apricot Lane must give the landlord at least 30 days' prior written notice, Apricot Lane must not be in default under the lease at the time of assignment, the new franchisee must meet Apricot Lane's standard franchisee criteria, the new franchisee must operate under the same trade name and permitted use as specified in the original lease, and the new franchisee cannot be reasonably denied by the landlord.
Furthermore, if the new franchisee subsequently defaults under their franchise agreement or the lease, Apricot Lane retains the right, but not the obligation, to take possession of the premises. In this scenario, Apricot Lane can ensure the premises continue to operate as required by the lease until another franchisee is assigned to the location. Additionally, Apricot Lane can take possession of the lease if they provide written notice of intent to take possession of the lease, regardless of whether the lease is in default or has been terminated. In this case, the franchisee cannot enter into further agreements with the lessor without Apricot Lane's express written permission and must assign the lease to Apricot Lane or its designee upon demand.