What right does the Big O Tires tenant have regarding a separate claim in a condemnation proceeding?
Big_O_Tires Franchise · 2025 FDDAnswer from 2025 FDD Document
- 18.3. Right to Awards. In the event of any condemnation or taking hereinabove mentioned of all or part of the Leased Premises, Landlord shall be entitled to receive the entire award in the condemnation proceeding, including any award made for the value of the estate vested by this Lease in Tenant, and Tenant hereby expressly assigns to Landlord any and all right, title, and interest of Tenant now or hereafter arising in or to any part thereof, and Tenant shall be entitled to receive no part of such award; provided, however, Tenant shall have the right, at its sole cost and expense, to assert a separate claim in any condemnation proceeding for its personal property and trade fixtures, as defined hereunder.
Source: Item 23 — RECEIPTS (FDD pages 102–535)
What This Means (2025 FDD)
According to the 2025 Big O Tires Franchise Disclosure Document, in the event of condemnation or taking of the leased premises, the landlord is entitled to receive the entire award from the condemnation proceeding, including any award for the value of the estate vested by the lease in the tenant. The tenant expressly assigns all rights, title, and interest to the landlord and will not receive any part of the award.
However, the Big O Tires tenant retains the right to assert a separate claim in any condemnation proceeding. This separate claim is specifically for the tenant's personal property and trade fixtures, as defined under the lease agreement. This provision ensures that while the landlord receives compensation for the real property and the leasehold interest, the tenant can independently seek compensation for their business assets located on the premises.
This clause protects the Big O Tires franchisee's investment in their personal property and trade fixtures, allowing them to recover losses related to these assets in the event of a condemnation. It is important for prospective franchisees to understand this allocation of rights in the event of condemnation, as it clarifies how compensation will be distributed and what claims they can independently pursue.