What is an 'Assignment Notice' in the context of a Brain Balance franchise's Conditional Assignment of Lease?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
If the Assignee elects to exercise its option to accept the assignment of the Lease and replace Assignor as tenant under the Lease pursuant to the terms set forth in this Assignment, it shall provide written notice of such acceptance to the Landlord (the "Assignment Notice").
Upon
Assignee's providing the Assignment Notice, Assignee shall become the tenant of the leased Premises and shall become liable for all obligations under the Lease arising after the date of the Assignment Notice. Landlord shall recognize Assignee as the tenant of the leased Premises effective as of the date of the Assignment Notice. If the Assignee elects to exercise its option to accept the assignment of the Lease, it agrees that the obligations assumed shall benefit the Landlord named in the Lease.
Source: Item 23 — RECEIPTS (FDD pages 72–292)
What This Means (2025 FDD)
According to the 2025 Brain Balance Franchise Disclosure Document, an 'Assignment Notice' is a written notification that BB Franchising LLC, as the Assignee, provides to the Landlord to exercise its option to accept the assignment of the lease and replace the franchisee (Assignor) as the tenant. This notice is relevant when certain events occur. These events include a default under the lease by the franchisee, a default under the Franchise Agreement by the franchisee, or the expiration and termination of the Franchise Agreement for any reason.
Upon the landlord's receipt of the Assignment Notice from Brain Balance, BB Franchising LLC becomes the tenant of the leased premises. BB Franchising LLC then becomes liable for all obligations under the lease that arise after the date of the Assignment Notice. The landlord is then required to recognize BB Franchising LLC as the tenant, effective from the date of the Assignment Notice.
This clause in the Franchise Agreement protects Brain Balance. It ensures that Brain Balance can maintain control of the location and continue operations, even if the franchisee fails to meet their obligations or the franchise agreement is terminated. For a prospective franchisee, this means that in the event of a default or termination, they will lose control of their leased premises, and Brain Balance will have the right to take over the lease.