What financial obligations remain for a Bens Soft Pretzels franchisee after termination or expiration?
Bens_Soft_Pretzels Franchise · 2025 FDDAnswer from 2025 FDD Document
- c. In the event of termination, Franchisee must discontinue the use of the Mobile Store at the Authorized Location, remove all Marks from the Mobile Store, and take all necessary steps to comply with the applicable post-term obligations of the Franchise Agreement that are applicable to the Mobile Store.
If you do not exercise your option to enter into a renewal agreement prior to the expiration of this Agreement and continue to accept the benefits of this Agreement after the expiration of this Agreement, then at our option, this Agreement may be treated either as (i) expired as of the date of expiration with you then operating a franchise without the right to do so and in violation of our rights; or (ii) continued on a month-to-month basis ("Interim Period") until one party provides the other with written notice of such party's intent to terminate the Interim Period, in which case the Interim Period will terminate thirty (30) days after receipt of the notice to terminate the Interim Period. In the latter case, all of your obligations shall remain in full force and effect during the Interim Period as if this Agreement had not expired, and all obligations and restrictions imposed on you upon expiration of this Agreement will be deemed to take effect upon termination of the Interim Period.
Tenant will remain liable for the responsibilities and obligations, including amounts owed to Landlord, prior to the date of assignment and assumption.
Further, Tenant shall be and remain liable to Landlord for all of its obligations under the Lease, notwithstanding any
assignment or assumption of the Lease by Franchisor. Franchisor shall be entitled to recover from Tenant all amounts it pays to Landlord to cure Tenant's defaults under the Lease, including interest and reasonable collection costs.
Source: Item 22 — CONTRACTS (FDD pages 46–47)
What This Means (2025 FDD)
Based on the 2025 Bens Soft Pretzels FDD, several financial obligations may persist for a franchisee even after the franchise agreement terminates or expires. If the franchisee continues to operate after the agreement's expiration without a renewal, it may be treated as operating a franchise without rights, or the agreement may continue on a month-to-month basis. During this interim period, all obligations remain in full effect, and restrictions imposed upon expiration take effect upon termination of the interim period. This means the franchisee is still responsible for ongoing fees and compliance.
Additionally, if Bens Soft Pretzels elects to assume the lease of the premises, the franchisee remains liable for all responsibilities and obligations, including amounts owed to the landlord, prior to the date of assignment and assumption. The franchisee is also liable for all its obligations under the lease, even if the lease is assigned to or assumed by Bens Soft Pretzels. Bens Soft Pretzels is entitled to recover from the franchisee any amounts it pays to the landlord to cure the franchisee's defaults under the lease, including interest and reasonable collection costs.
Furthermore, in the event of termination, the franchisee must discontinue the use of the Mobile Store at the Authorized Location, remove all Marks from the Mobile Store, and take all necessary steps to comply with the applicable post-term obligations of the Franchise Agreement that are applicable to the Mobile Store. These post-term obligations could potentially involve further financial implications, such as costs associated with removing signage and rebranding the location. A prospective franchisee should carefully review the franchise agreement to fully understand all potential financial obligations that could extend beyond the termination or expiration of the agreement.