Does Bens Soft Pretzels have the right to receive notices of default directly from the lessor?
Bens_Soft_Pretzels Franchise · 2025 FDDAnswer from 2025 FDD Document
If you lease your business premises, the lease must include language contained in the Lease Rider which is attached to your Franchise Agreement as Schedule C. The lease shall give us, our agents or designees the right to enter the premises to conduct inspections at any time during regular business hours, the right to receive notices of default directly from the lessor and the right, but not the duty, to assume the lease for all or any part of the term, if you default under the lease, are evicted or if your Franchise Agreement expires or is terminated.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 23–30)
What This Means (2025 FDD)
According to Bens Soft Pretzels's 2025 Franchise Disclosure Document, if a franchisee leases their business premises, the lease agreement must include a Lease Rider, which is attached to the Franchise Agreement as Schedule C. This Lease Rider stipulates that Bens Soft Pretzels, its agents, or designees have the right to receive notices of default directly from the lessor. This provision ensures that Bens Soft Pretzels is informed if the franchisee fails to meet their lease obligations.
This right allows Bens Soft Pretzels to stay informed about the franchisee's compliance with the lease terms, which is crucial for maintaining the stability and reputation of the franchise system. If a franchisee defaults on their lease, Bens Soft Pretzels can take proactive steps to address the issue, potentially preventing eviction and business disruption. This can include working with the franchisee to resolve the default or, if necessary, exercising their right to assume the lease.
Furthermore, the Lease Rider also grants Bens Soft Pretzels the right to enter the premises for inspections during regular business hours and the option, but not the obligation, to assume the lease if the franchisee defaults, is evicted, or if the Franchise Agreement expires or is terminated. These rights provide Bens Soft Pretzels with significant control and oversight over the leased premises, helping to protect their interests and the overall integrity of the franchise network.
For a prospective franchisee, this means that they must agree to lease terms that allow Bens Soft Pretzels to be directly informed of any lease defaults and to potentially take over the lease if necessary. This is a standard practice in franchising, designed to protect the franchisor's investment and brand standards.