Who controls the lease terms for an SRU operated by an Auntie Annes franchisee?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
Lessee desires to lease from Lessor a Satellite Retail Unit (a "SRU") to be utilized in connection with the operation of the Shop at the Location pursuant to a lease agreement between Lessee and the landlord ("Landlord") of the Location (the "Lease Agreement").
Lessor has agreed to lease to Lessee the SRU under the following terms and conditions:
-
- Lessee Obligations. Lessee must provide Lessor with the following items:
- a. Lease Agreement. A copy of the signed Lease Agreement or a letter of approval from the Landlord for the operation of the SRU for a minimum term of two (2) months shall be delivered the Lessor upon execution of this Agreement. Lessor does not guarantee that an SRU will be available for the same term as the Lease Agreement. Lessee understands that due to the limited number of SRUs, Lessor cannot guarantee that the SRU will be delivered upon the commencement date of the Lease Agreement. Lessor reserves the
Source: Item 10 — FINANCING (FDD page 61)
What This Means (2024 FDD)
According to Auntie Annes's 2024 Franchise Disclosure Document, the lease terms for a Satellite Retail Unit (SRU) operated by a franchisee are primarily determined by the lease agreement between the franchisee (Lessee) and the landlord of the location. However, Auntie Annes (Lessor) also has specific conditions and requirements related to the SRU lease.
The franchisee is required to provide Auntie Annes with a copy of the signed lease agreement or a letter of approval from the landlord for operating the SRU, with a minimum term of two months. Auntie Annes does not guarantee that an SRU will be available for the same term as the lease agreement.
Auntie Annes retains the right to terminate the SRU lease agreement and recover the SRU, regardless of any remaining terms in the franchisee's lease agreement with the landlord. This indicates that while the franchisee negotiates the initial lease with the landlord, Auntie Annes maintains control over the SRU itself and can override the lease agreement under certain conditions.