Regarding utilities for a Beef O Bradys franchise, what is the landlord's obligation to the tenant?
Beef_O_Bradys Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) Franchisor as Tenant. In the event Franchisor becomes the tenant under the Lease, whether by assignment or by exercise of its rights under its franchise documents, Landlord recognizes Franchisor as the Tenant under the Lease and Franchisor will, within 10 days of it becoming the Tenant, cure any then existing default in the payment of rent; provided however that Franchisor will not have any obligation to cure any default in the payment of rent as to which Franchisor was not given notice by Landlord within 20 days following the date such rent was due. The preceding sentence will not prevent Landlord from pursuing Tenant for such past due rent. Nothing in this Agreement and no exercise of any rights hereunder (including, without limitation, any curing of any Tenant's default by Franchisor) will be construed as creating on Franchisor any liability or obligation under the Lease or as Franchisor assuming any liability or obligation under the Lease; any assumption by Franchisor of any obligations under the Lease will only occur by specific written assumption executed by Franchisor. In the event Franchisor succeeds to the interest of Tenant under the Lease, Franchisor will not be responsible for any claims which Landlord may have against any prior Tenant under the Lease; except that Franchisor will pay any past due rental, subject to the limitations set out above. If Franchisor assumes the Lease, its liability under the Lease will extend only to the period of time that it is the Tenant under the Lease and will terminate upon any permitted assignment of the Lease by Franchisor.
- (d) Amendment. Landlord and Tenant will not cancel, terminate, modify or amend this Lease including, without limitation, Franchisor's rights under this Section, without Franchisor's prior written consent, except that, subject to Franchisor's cure rights, this paragraph will not prevent Landlord from exercising any right to cancel or terminate the Lease due to Tenant's default.
- (e) Successors. The benefits of this Section will inure to Franchisor's successors and assigns.
Source: Item 23 — RECEIPTS. (FDD pages 66–330)
What This Means (2025 FDD)
The 2025 Beef O Bradys Franchise Disclosure Document (FDD) outlines specific obligations of the landlord if the franchisor, FSC FRANCHISE CO., LLC, becomes the tenant under the lease. If Beef O Bradys becomes the tenant, the landlord must recognize them as such. Within 10 days of this transition, Beef O Bradys is obligated to cure any existing default in rent payment, provided the landlord notifies Beef O Bradys of the default within 20 days of the original due date. This clause protects the landlord by ensuring timely rent payments and protects Beef O Bradys by limiting their responsibility to defaults they were promptly informed about.
However, the FDD explicitly states that Beef O Bradys is not obligated to cure any rent default if the landlord fails to provide notice within the specified 20-day period. This provision encourages landlords to promptly communicate any payment issues. Importantly, the original tenant remains liable for any past due rent, even if Beef O Bradys later cures the default. This clarifies that the landlord retains the right to pursue the original tenant for outstanding debts, regardless of Beef O Bradys's intervention.
The document emphasizes that neither the agreement itself nor any actions taken by Beef O Bradys, such as curing a tenant's default, should be interpreted as creating any liability or obligation for Beef O Bradys under the lease. Any assumption of obligations by Beef O Bradys must be explicitly stated in a separate written agreement. If Beef O Bradys assumes the lease, their liability is limited to the period they are the tenant and terminates upon any permitted assignment of the lease. This protects Beef O Bradys from inheriting long-term or unforeseen liabilities associated with the property.
Furthermore, the landlord and tenant are prohibited from canceling, terminating, modifying, or amending the lease, including Beef O Bradys's rights, without the prior written consent of Beef O Bradys. An exception exists, however, allowing the landlord to cancel or terminate the lease due to the tenant's default, subject to Beef O Bradys's cure rights. This ensures that Beef O Bradys maintains control over lease modifications while allowing the landlord to address tenant defaults. The benefits of this section of the agreement extend to Beef O Bradys's successors and assigns, ensuring continuity of these protections.