What is being assigned in the Collateral Assignment of Lease for Burros Fries?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
| Franchisee: | |
|---|---|
| Franchisor: Burros & Fries Franchise, Inc., a California corporation | |
| Date of this Collateral Assignment of Lease | , 20 |
| (the "Assignment"): | |
| The Franchisee, to effect various provisions of that certain Franchise Agreement dated by and between Franchisee and Franchisor (the "Franchise Agreement"), hereby collaterally Franchisor (subject to the terms and conditions below) all of Franchisee's right, title and interest in, to and | , 20 , assigns to |
| under that certain lease (the "Lease") | 20, |
| dated | |
| between Franchisee and, ("Landlord"), for | |
| that property commonly known as: (the "Premises"), | |
| a copy of which Lease is attached to this | |
| Assignment. |
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to the 2024 Burros Fries Franchise Disclosure Document, the Collateral Assignment of Lease involves the franchisee assigning to Burros Fries Franchise, Inc. all of the franchisee's rights, title, and interest in the lease for the property where the Burros Fries business will operate. This assignment is subject to the terms and conditions outlined in the Franchise Agreement.
This means that as a Burros Fries franchisee, you are essentially giving the franchisor a security interest in your lease. This protects Burros Fries's interest in maintaining the location of the franchise. If the franchisee defaults on the Franchise Agreement, Burros Fries can step in and take over the lease to continue operating the business at that location.
Burros Fries requires that the franchisee obtain written consent before executing any lease or sublease for the business, or making any modifications or amendments to it. The franchisee must also provide Burros Fries with a copy of any lease or sublease for review at least ten days before signing, and a copy of the signed lease or sublease within five business days after it is signed. This ensures that Burros Fries has control over the location of its franchises and can protect its brand standards.
The lease must include provisions that allow the franchisee to operate a Burros & Fries business, restrict the site to only Burros & Fries operations, require the lessor to provide Burros Fries with default notices, and grant Burros Fries the right to take assignment and possession of the business. This is a common practice in franchising to protect the franchisor's investment and brand.