For what purpose is the Franchisor, Buns On Fire, executing the lease agreement?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
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ARTICLE II DEVELOPMENT AND OPENING OF THE FRANCHISED BUSINESS
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."
2.2 Approval of Lease Terms
The Franchisor shall have the right to approve any and all of the lease terms for the premises of the Franchised Business. In the event the Franchisor cures any default by Franchisee under such lease, the total amount of all costs and payments incurred by the Franchisor in effecting such cure shall be immediately due and owing by Franchisee to the Franchisor, including, but not limited to, any and all attorney's fees.
2.3 Execution of Lease and Acceptance by Franchisee
Franchisee's execution of a lease for the location of the Franchised Business shall constitute acceptance by Franchisee of such location and site and the terms of such a lease and shall constitute a waiver of any claim or rights against the Franchisor relating to Franchisee's choice of such site and location and of the terms of such a lease.
2.4 Prototype Plans and Specifications
The Franchisor will provide Franchisee prototype or protostyle plans and specifications for Franchisee's Franchised Business reflecting the Franchisor's requirements for dimensions, exterior design, interior design and layout, image, building materials, fixtures, equipment, furniture, signs and decor. Franchisee agrees to use Franchisor's approved architecture and engineering firms to prepare all construction/design plan set for the Franchised Business.
2.5 Development of Franchised Business
Within ninety (90) days after attaining possession of the premises of the Franchised Business and being furnished with the above-described plans and specifications, Franchisee will do, or cause to be done the following:
- (i.) Secure all financing required to fully develop the Franchised Business;
- (ii.) Prepare, at Franchisee's expense, and submit to Franchisor for approval, which approval may be granted or withheld at the Frhisor's sole discretion, any and all proposed modifications to the Franchisor's prototype or protostyle plans and specifications, which may be modified only to the extent necessary to comply with applicable ordinances, building codes, permit requirements and lease or deed requirements and restrictions, all such modifications being subject to prior notification to, and approval by, the Franchisor;
Source: Item 23 — RECEIPTS (FDD pages 49–200)
What This Means (2025 FDD)
According to the 2025 Buns On Fire Franchise Disclosure Document, Buns On Fire may require the franchisee to conditionally assign the lease to them to secure the franchisee's performance of their liabilities and obligations to Buns On Fire. This conditional assignment is formalized through provisions annexed to the Franchise Agreement as Exhibit "C".
To ensure Buns On Fire's interests are protected, the lease agreement must contain specific clauses. These clauses include the lessor's agreement to allow the franchisee to assign the lease to SMYA Ventures LLC (or its designee) without the lessor's consent, the lessor's agreement to disclose sales reports to Buns On Fire upon request, and the lessor's obligation to notify Buns On Fire of any default by the franchisee, giving Buns On Fire the right to cure the default.
Additionally, the lease terms must stipulate that the premises are used solely for operating a Buns On Fire restaurant while the Franchise Agreement is in effect. The lessor must also consent to the franchisee's use of Buns On Fire's standard design concepts, specifications, Marks, and prescribed signage. The franchisee cannot assign occupancy rights, extend the lease term, or renew the lease without Buns On Fire's prior written consent. The lessor must provide Buns On Fire with a copy of the executed lease and any related agreements within five days of execution, and any lease amendments affecting these terms require Buns On Fire's prior written approval. If the Franchise Agreement expires or terminates, Buns On Fire has the option to have the franchisee's rights under the lease transferred and assigned to them, allowing Buns On Fire to assign or sublet the premises to another party.