What happens to the leasehold estate if the sublease with Bens Soft Pretzels is terminated?
Bens_Soft_Pretzels Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor Entity shall have the option, for 30 days after receipt of said notice, to exercise the Tenant's renewal or extension right(s) on the same terms and conditions as are contained in the Lease. If a Franchisor Entity elects to exercise such right(s), it shall so notify Landlord in writing, whereupon Landlord and the Franchisor Entity shall promptly execute and deliver an agreement whereby the Franchisor Entity assumes the Lease, effective at the commencement of the extension or renewal term.
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- Access to Premises Following Expiration or Termination of Lease. Upon the expiration or termination of the Lease, Landlord will cooperate with and assist Franchisor in gaining possession of the Premises and, if the Franchisor Entity does not elect to assume the Lease for the Premises consistent with subparagraphs 3(a) or 4(b) above, Landlord will allow Franchisor to enter the Premises, without being guilty of trespass and without incurring any liability to Landlord except for any damages caused by Franchisor's willful misconduct or gross negligence, to remove all signs and all other items identifying the Premises as a BEN'S SOFT PRETZELS Store and to make such other modifications (such as repainting) as are reasonably necessary to protect the BEN'S SOFT PRETZELS marks and system, and to distinguish the Premises from BEN'S SOFT PRETZELS Stores. In the event Franchisor exercises its option to purchase assets of Tenant, Landlord must permit Franchisor to remove all such assets being purchased by Franchisor.
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- Assumption and Subsequent Assignment By Franchisor. If Franchisor elects to assume the Lease under paragraph 2, or unilaterally assumes the Lease as provided for in paragraphs 3 or 4, Landlord and Tenant agree that:
- (a) 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.
- (b) Franchisor, upon taking possession of the Premises, shall cure any default specified by Landlord within the timeframes noted herein and shall execute and deliver to Landlord its assumption of Tenant's rights and obligations under the Lease.
Source: Item 22 — CONTRACTS (FDD pages 46–47)
What This Means (2025 FDD)
According to the 2025 Bens Soft Pretzels Franchise Disclosure Document, several provisions address the scenario where the sublease is terminated. The sublease agreement incorporates the original lease in its entirety, making the franchisee (Subtenant) subject to all conditions and obligations of the original lease, while rent is paid to Bens Soft Pretzels LLC (Sublessor). If the lease is terminated, the landlord will cooperate with Bens Soft Pretzels Franchising Corporation to gain possession of the premises. If Bens Soft Pretzels Franchising Corporation does not assume the lease, the landlord will allow Bens Soft Pretzels Franchising Corporation to enter the premises to remove signage and make modifications to protect their marks and system.
Bens Soft Pretzels Franchising Corporation also has the option to purchase the assets of the franchisee (Tenant). If this option is exercised, the landlord must allow Bens Soft Pretzels Franchising Corporation to remove all purchased assets. The franchisee remains liable for all obligations under the lease prior to any assignment or assumption by Bens Soft Pretzels Franchising Corporation. Bens Soft Pretzels Franchising Corporation is entitled to recover from the franchisee any amounts paid to the landlord to cure the franchisee's defaults, including interest and collection costs.
In the event of a franchisee's breach leading to lease cancellation, the franchisee does not have the right to relocate. Such a breach is grounds for immediate termination of the franchise agreement. These measures protect the Bens Soft Pretzels brand and ensure consistent operation standards across all locations. Prospective franchisees should carefully consider these terms and their implications for the security of their business location and investment.