What is the requirement for a subsequent assignee of the lease to be accepted by the Landlord after Baya Bar assigns it?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
| property known as | to that Conditional Assignment of Lease from (Assignor) to Baya Bar Franchise Systems, LLC (Assignee) dated for the |
|---|---|
| The undersigned Landlord under the aforedescribed Lease further hereby: | |
| (a) | Agrees to notify Assignee in writing of and upon the failure of Assignor to cure any default by Assignor under the Lease; |
| (b) | Agrees that Assignee shall have the right, but shall not be obligated, to cure any default by Assignor under the Lease within 30 days after delivery by Landlord of notice thereof in accordance with paragraph (a) above; |
| (c) | Consents to the foregoing Conditional Assignment and agrees that if Assignee takes possession of the Premises demised by the Lease and confirms to Landlord the assumption of the Lease by Assignee as tenant thereunder, Landlord shall recognize Assignee as tenant under the Lease, provided that Assignee cures within the 30-day period the non-monetary defaults, if any, of Assignor under the Lease; |
| (d) | Agrees that Assignee may further assign the Lease to a person, firm or corporation who shall agree to assume the tenant's obligations under the Lease and who is reasonably acceptable to Landlord and upon such assignment Assignee shall have no further liability or obligation under the Lease as assignee, tenant or otherwise. |
Source: Item 22 — CONTRACTS (FDD page 56)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, if Baya Bar, as the assignee of a lease, wants to further assign the lease to another party, the landlord must find the new party reasonably acceptable. The subsequent assignee must also agree to assume the tenant's obligations under the lease. Once these conditions are met and the assignment is completed, Baya Bar will no longer have any liability or obligation under the lease as an assignee or tenant.
This provision protects the landlord by ensuring that any new tenant is creditworthy and responsible. It also allows Baya Bar to exit the lease agreement completely after assigning it, which is beneficial for the company.
For a prospective Baya Bar franchisee, this clause is relevant if Baya Bar has taken over a lease from a previous tenant and the franchisee later wants to assign the lease to someone else. The franchisee should ensure that any potential assignee meets the landlord's criteria for acceptability to facilitate a smooth transfer and release Baya Bar from further obligations.