What is the significance of the Contract Date in relation to the Bimbo Foods Bakeries Distribution lease agreement?
Bimbo_Foods_Bakeries_Distribution Franchise · 2025 FDDAnswer from 2025 FDD Document
THIS LEASE AGREEMENT ("Lease") is hereby entered into as of the Contract Date above by and between BUSH LEASING TRUST, a Delaware statutory trust ("Lessor"), and LESSEE referenced above.
GRANT OF LEASE.
Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the Equipment described herein, together with all replacements, repairs and additions thereto (individually and collectively, the "Vehicles") on the terms and conditions set forth in this Lease.
Lessee agrees that Lessee leases the Vehicles "as-is", and confirms that as of the date of delivery of each Vehicle, such Vehicle is of the design and manufacture selected by Lessee, and as of such date, Lessee has unconditionally accepted such Vehicles in all respects.
Lessee further confirms that it has selected the Vehicles on the basis of its own judgment, and expressly disclaims reliance upon any statements, representations, or warranties made by Lessor, and Lessee acknowledges that Lessor is not the manufacturer of the Vehicles.
Lessee certifies that the Vehicles identified herein will be used for commercial purposes.
INITIAL TERM.
The term of this Lease for each Vehicle shall commence on the Contract Date and shall continue for that number of months from the first (1st) day of the month following the Contract Date (unless the Contract Date is the first (1st) day of the month, in which case the Contract Date shall be the date on which the term of this Lease commences) ("Commencement Date") each as set forth in the Summary of Lease Terms (such period as extended or sooner terminated by Lessor as provided herein, the "Term").
RENT.
The rental payment amount for each Vehicle hereunder (the "Basic Rent") is set forth in the Summary of Lease Terms.
Basic Rent on each Vehicle shall begin to accrue on the Contract Date and shall be due and payable in U.S. dollars in immediately available funds by Lessee in advance or arrears for the periods (each a "Rental Period") and for the total number of payments as set forth in the Summary of Lease Terms, in each case, on the first day of each such Rental Period.
If the Contract Date does not fall on the first day of the month, the rental for that period of time from the Contract Date until the Commencement Date shall be an amount equal to the daily rental (Basic Rent divided by 7 days for One Week, 14 days for One Biweekly and 30 days for One Month Rental Periods, as applicable), multiplied by the number of days from (and including) the Contract Date to (but not including) the Commencement Date and shall be due and payable on the Commencement
Source: Item 14 — Other Accounts Payable and Accrued Liabilities (FDD pages 312–476)
What This Means (2025 FDD)
According to Bimbo Foods Bakeries Distribution's 2025 Franchise Disclosure Document, the Contract Date is a key factor in determining when the lease term begins and when rental payments are due. The lease agreement is effective as of the Contract Date, which is established between Bush Leasing Trust (Lessor) and the LESSEE.
The term of the lease for each vehicle commences on the Contract Date and continues for a specified number of months from the first day of the month following the Contract Date, referred to as the "Commencement Date." However, if the Contract Date falls on the first day of the month, then the Contract Date also serves as the Commencement Date. This distinction is important because it determines when the lease officially begins and when the franchisee's payment obligations start.
Basic Rent for each vehicle begins to accrue on the Contract Date and is payable in U.S. dollars. If the Contract Date does not fall on the first day of the month, the franchisee will owe a prorated rental amount for the period between the Contract Date and the Commencement Date. This amount is calculated by dividing the Basic Rent by the number of days in the rental period (7 for One Week, 14 for One Biweekly, or 30 for One Month) to determine a daily rental rate, which is then multiplied by the number of days from the Contract Date to the Commencement Date. This prorated amount is due on the Commencement Date.