Can the landlord increase the rent upon assignment of the lease to the Beauty Bungalows company?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Franchisee will be permitted to assign the Lease to Company or its designee upon the expiration or termination of the Franchise Agreement. Landlord consents to such an assignment and agrees not to impose any assignment fee or similar change, or to increase or accelerate rent under the Lease, in connection with such an assignment.
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- If Franchisee assigns the Lease to Company or its designee in accordance with the preceding paragraph, the assignee must assume all obligations of Franchisee under the Lease from and after the date of assignment, but will have no obligation to pay any delinquent rent or to cure any other default under the Lease that occurred or existed prior to the date of the assignment.
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- Franchisee may not assign the Lease or sublet the Premises without Company's prior written consent, and Landlord will not consent to an assignment or subletting by Franchisee without first verifying that Company has given its written consent to Franchisee's proposed assignment or subletting.
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- Landlord and Franchisee will not amend or modify the Lease in any manner that could materially affect any of the provisions or requirements of this Lease Rider without Company's prior written consent.
Source: Item 22 — CONTRACTS (FDD pages 47–48)
What This Means (2025 FDD)
According to Beauty Bungalows's 2025 Franchise Disclosure Document, the landlord is restricted from increasing the rent if the lease is assigned to Beauty Bungalows or its designee. Specifically, the lease rider states that the landlord consents to the assignment and agrees not to impose any assignment fee or similar charge, or to increase or accelerate rent under the lease, in connection with such an assignment. This provision is designed to protect the franchisee from unexpected cost increases should the lease be transferred to Beauty Bungalows under certain conditions, such as the expiration or termination of the franchise agreement.
This clause provides a degree of financial security for Beauty Bungalows franchisees. It ensures that the rental costs remain stable if the company needs to take over the lease, preventing potential disputes or increased expenses. This is a beneficial term for the franchisee, as it limits the landlord's ability to exploit the assignment of the lease for financial gain. The lease rider also outlines that the assignee, whether it's Beauty Bungalows or its designee, must assume all obligations of the franchisee under the lease from the assignment date forward. However, the assignee is not responsible for any delinquent rent or defaults that occurred before the assignment date.
Furthermore, the FDD specifies that the franchisee cannot assign the lease or sublet the premises without Beauty Bungalows's prior written consent. The landlord also cannot consent to an assignment or subletting by the franchisee without verifying that Beauty Bungalows has given its written consent. This requirement ensures that Beauty Bungalows maintains control over the location and operation of its franchises. Additionally, any amendments or modifications to the lease that could materially affect the provisions of the lease rider require Beauty Bungalows's prior written consent, further safeguarding the company's interests and the integrity of the franchise agreement.