Does Rayyan Pizza Franchise LLC, operating as Aw, have any liability or obligation arising from the Collateral Assignment of Lease?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
| (a) | Consents | to the | foregoing | Collateral | Assignment | of Lease | executed by ("Assignor") in favor of Rayyan Pizza Franchise |
|---|---|---|---|---|---|---|---|
| Assignor under the Lease within thirty (30) days of notice to Assignee its defaults; and | LLC ("Assignee), and agrees that if Assignee takes possession of the leased premises and confirms to Lessor the assumption of the Lease by Assignee as lessee under it in writing, Lessor shall recognize Assignee as lessee under the Lease, provided that Assignee cures the defaults of that Assignor has not cured | ||||||
| (b) | LESSOR: | under the Lease and who is reasonably acceptable to Lessor, and upon such shall have no further liability or obligation under the Lease as assignee, lessee or otherwise. | Agrees that Assignee may further assign the Lease to a person, firm or corporation who has been granted a franchise by Assignee and who agrees to assume the lessee's obligations assignment Assignee |
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, Rayyan Pizza Franchise LLC, as the assignee, may acquire certain liabilities or obligations under the Collateral Assignment of Lease if it takes possession of the leased premises. Specifically, if Aw takes possession and confirms in writing to the lessor that it assumes the lease, the lessor must recognize Aw as the lessee. However, this is conditional on Aw curing any defaults of the original assignor (the franchisee) that the assignor failed to cure within thirty days of receiving notice.
Furthermore, Aw retains the right to further assign the lease to another franchisee who is approved by the lessor and who agrees to assume the obligations of the lessee. Upon such an assignment, Aw would relinquish any further liability or obligation under the lease. This clause protects Aw by allowing them to transfer the lease obligations to a new franchisee, thus limiting their long-term exposure related to the lease.
In summary, while Aw does not automatically assume liability under the lease, it may do so if it takes possession of the property and confirms the assumption of the lease in writing. However, Aw can then assign the lease to another franchisee, thereby relieving itself of further obligations. This arrangement provides Aw with a mechanism to manage lease liabilities while maintaining operational flexibility.