What is the dependency between the lease assignment and the Buns On Fire Franchise Agreement?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
The clauses referred to in Article 2.1 of the attached Franchise Agreement are as follows:
(i.) The premises being leased hereunder shall be used solely for the operation of an "Buns on Fire" restaurant, during the time that the Franchise Agreement is still in effect.
(ii.) Lessor has examined Franchisor's standard design concepts and specifications and consents to Lessee's use of same and of the Marks and such signage as the Franchisor may prescribe for the Franchised Business.
(iii.) Lessee may not assign all or any part of its occupancy rights, or extend the term or renew the lease, without Franchisor's prior written consent.
(iv.) Lessor shall furnish Franchisor a copy of the executed lease, including all attachments thereto and related agreements, if any, within five (5) days after its execution, and no change or amendment to such lease affecting the above terms and conditions shall be effective without Franchisor's prior written approval.
(v.) Notwithstanding anything to the contrary contained in this Lease, it is expressly understood and agreed that if the Franchise Agreement dated the day of , 20 between the Lessee and the Franchisor expires or is terminated for any reason whatsoever, the Lessee's rights hereunder shall, at the option of the Franchisor, be transferred and assigned to it.
Said option may be exercised by the Franchisor giving the Lessor notice in writing within thirty (30) days following the expiration or termination of the said Franchise Agreement, such notice to specify, inter alia, the date of such expiration or termination.
The Lessee acknowledges and agrees that the Lessor may rely upon such notice and shall not be required to inquire into the due execution thereof or the accuracy of the statements set forth therein.
It is further agreed that such notice shall, without further act or formality, operate as an effective assignment of the Lessee's right hereunder to the Franchisor and the assumption by the Franchisor of the covenants herein required to be observed or performed by the Lessee.
The Franchisor shall thereafter have the right to assign or sublet the Premises to such person as it may designate, provided that in such event that this clause be contained therein.
Source: Item 23 — RECEIPTS (FDD pages 49–200)
What This Means (2025 FDD)
According to the 2025 Buns On Fire Franchise Disclosure Document, the lease for the premises of the Buns On Fire restaurant is directly tied to the Franchise Agreement. Specifically, the premises must be used solely for operating a Buns On Fire restaurant, and this is only during the time the Franchise Agreement is in effect. This means that the lease is contingent upon the active status of the Franchise Agreement.
Several clauses in the lease agreement ensure this dependency. For instance, the franchisee (Lessee) cannot assign occupancy rights, extend the lease term, or renew the lease without Buns On Fire's prior written consent. Furthermore, Buns On Fire is entitled to receive a copy of the executed lease and any amendments, ensuring they are informed and can approve changes.
Most importantly, if the Franchise Agreement expires or is terminated for any reason, Buns On Fire has the option to take over the lease. Buns On Fire can exercise this option by providing written notice to the lessor within thirty days of the termination or expiration of the Franchise Agreement. This notice effectively assigns the lease to Buns On Fire, allowing them to maintain control of the location and potentially re-franchise it or operate it themselves. This conditional lease assignment is a critical mechanism for Buns On Fire to protect its brand and location.