Does the Buns On Fire franchise agreement include provisions for conditional lease assignments?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
2.1 Franchised Business Premises
- (i.) Franchisee shall operate the Franchised Business from a location in the Protected Territory. Franchisee shall acquire or lease within ninety (90) days from the date of execution of this Agreement, an approved premises for the Franchised Business. The Franchisor shall have the right in its sole discretion, to require:
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- Franchisee to execute a Site Addendum Agreement in the form attached hereto;
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- Franchisee to conditionally assign such lease to the Franchisor (with the consent of the lessor, if required) by conditional lease assignment provisions in form annexed to Franchise Agreement as Exhibit "C" in order to secure performance of any and all of Franchisee's liabilities and obligations to the Franchisor; or
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3. That such lease contains substantially the following provisions:
- a. "Anything contained in this lease to the contrary notwithstanding, Lessor agrees that without its consent, this lease and the right, title and interest of the Lessee hereunder may be assigned by the Lessee to SMYA Ventures LLC, an Illinois limited liability company or its designee."
- b. "Lessee hereby agrees that Lessor may, upon the written request of Buns on Fire, disclose to Buns on Fire all reports, information or data in Lessor's possession with respect to sales made in, upon, or from the leased premises."
- c. "Lessor shall give written notice to Buns on Fire (concurrently with the giving of such notice to Lessee) of any default by Lessee under the lease and Buns on Fire shall have the right, in its sole discretion, to cure any such default. Such notice shall be sent to Buns on Fire at its headquarters, or such other address as Buns on Fire may specify in writing to Lessor."
Source: Item 22 — CONTRACTS (FDD pages 48–49)
What This Means (2025 FDD)
Yes, according to the 2025 Buns On Fire Franchise Disclosure Document, the franchise agreement includes provisions for conditional lease assignments. Specifically, Buns On Fire has the right to require a franchisee to conditionally assign their lease to the franchisor to secure the franchisee's obligations. This assignment, if required, is formalized through conditional lease assignment provisions outlined in Exhibit C of the franchise agreement. The franchisor needs the lessor's consent for this assignment if it is required by the lease.
Furthermore, the lease agreement must contain clauses that allow the franchisee to assign the lease to SMYA Ventures LLC (or its designee) without the lessor's consent. The lessor must also agree to provide Buns On Fire with sales data from the leased premises upon request and notify Buns On Fire of any lease defaults by the franchisee, giving Buns On Fire the option to cure the default. These stipulations ensure Buns On Fire maintains some control over the leased premises and can protect its interests should the franchisee fail to meet their obligations.
In the event of termination or expiration of the franchise agreement, Buns On Fire has the option to have the lease rights transferred and assigned to them. To exercise this option, Buns On Fire must provide written notice to the lessor within thirty days of the termination or expiration date. This notice effectively assigns the lease to Buns On Fire, allowing them to assume the franchisee's obligations and subsequently assign or sublet the premises to another party, provided that the new agreement contains a similar clause. Upon termination of the franchise, the franchisee must also vacate the premises according to the terms of the lease or conditional lease assignment.