Under what condition does the Assignee have the right to expel Buona's Assignor from the leased premises?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
a) Upon Lessee's default and failure to cure the default within the applicable cure period, if any, under either the Lease or the Franchise Agreement, Franchisor will, at its option, have the right, but not the obligation, to take an automatic assignment of Lessee's interest and at any later time to re-assign the Lease to a new franchisee without Lessor's consent and to be fully released from any and all liability to Lessor upon the reassignment, provided the franchisee agrees to assume Lessee's obligations and the Lease.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, upon the Lessee's default and failure to cure that default within the applicable cure period under either the Lease or the Franchise Agreement, Buona, at its option, has the right to take an automatic assignment of the Lessee's interest. Buona can then re-assign the Lease to a new franchisee without the Lessor's consent and be fully released from any and all liability to Lessor upon the reassignment, provided the franchisee agrees to assume Lessee's obligations and the Lease.
This clause protects Buona by allowing them to maintain control over the location of a franchise even if the original franchisee defaults. This is a common practice in franchising, as it allows the franchisor to ensure that the location remains a viable business.
For a prospective franchisee, this means that if they default on their lease or franchise agreement, Buona has the right to take over their lease and re-assign it to another franchisee. This could result in the original franchisee losing their business and investment. It is important for franchisees to carefully review the lease and franchise agreement to understand their obligations and the consequences of default.