What agreement is required if Boulder Designs Franchising, LLC assumes the lease?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisor cures Tenant's default, or notifies Landlord of the termination of the Franchise Agreement, Franchisor shall have the right and option, upon written notice to Landlord, to do the following:
At any time within or at the conclusion of such six-month period, assume the terms, covenants, obligations, and conditions of the Lease for the remainder of the term, together with any applicable renewal options.
In such event, Landlord and Franchisor shall enter into an agreement to document such assumption.
Franchisor is not a party to the Lease and shall have no liability under the Lease unless and until said Lease is assigned to, and assumed by, Franchisor as herein provided.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, if Boulder Designs cures a tenant's default or notifies the landlord of the termination of the Franchise Agreement, Boulder Designs has the right and option, upon written notice to the landlord, to assume the terms, covenants, obligations, and conditions of the lease for the remainder of the term, including any applicable renewal options. In such an event, the landlord and Boulder Designs must enter into an agreement to document this assumption.
This agreement formalizes Boulder Designs' commitment to fulfill the lease obligations, providing assurance to the landlord. It also clarifies that Boulder Designs is not liable under the lease until it is officially assigned to and assumed by them.
This clause protects Boulder Designs from inheriting the lease automatically upon curing a default or terminating the franchise agreement. It gives Boulder Designs the option to take over the lease if they choose, especially if they plan to install a new franchisee at the location. For a prospective franchisee, this means that Boulder Designs has a mechanism to ensure continuity of the business at the approved location, which can be beneficial in certain circumstances.