Can Burros Fries condition or withhold consent for a lease or sublease?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee shall not execute a lease or sublease for the Business, or make any modifications or amendments to the lease or sublease, without our prior written consent, which we may grant, condition or withhold in our Business Judgment. Franchisee will deliver to us a copy of any lease or sublease for our review at least ten (10) days before execution. Franchisee must deliver a copy of the signed lease or sublease to us within five (5) business days after it is signed. We do not offer legal services to Franchisee and Franchisee is encouraged to consult with independent legal counsel for a legal review of the lease. Franchisee shall ensure that the lease or sublease for the Business contains, in an addendum or otherwise, the following provisions which:
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- Permit Franchisee to operate a Burros & Fries Business in accordance with this Agreement and the Manuals;
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- Provide that the site will be used only for the operation of a Burros & Fries Business, and prohibit Franchisee from assigning or modifying any of Franchisee's lease rights, or extending the term without our prior written consent;
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- Require the lessor to concurrently provide us with a copy of any written notices of default to Franchisee under the lease and give us the right to cure any default if weso choose; within fifteen (15) days following the expiration of the Franchisee's cure period under the lease;
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- Provide us with a right to take assignment and possession of the Business, without the lessor's consent or any additional consideration. If we exercise this right and
Franchisee is in good standing, we'll sign a sublease with Franchisee for the same rent Franchisee is paying. In any case, we won't have any liability for any obligations incurred prior to our occupancy. Franchisee agrees to take whatever actions are necessary to accomplish such assignment and will, when you sign this Agreement, also sign the Collateral Assignment of Lease attached as Schedule 6. If Franchisee loses lease rights to the site in connection with any bankruptcy, the lessor will, on our request, enter into a new lease with us on essentially the same terms as the terminated lease;
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to Burros Fries's 2024 Franchise Disclosure Document, a franchisee needs prior written consent from Burros Fries to execute a lease or sublease for their business. Burros Fries has the right to grant, condition, or withhold this consent based on their business judgment.
Before signing any lease or sublease, a franchisee must provide Burros Fries with a copy for review at least ten days in advance. After the lease or sublease is signed, the franchisee must provide a copy to Burros Fries within five business days. The FDD emphasizes that Burros Fries does not offer legal services and encourages franchisees to seek independent legal counsel for reviewing the lease.
The lease or sublease must include specific provisions that allow the franchisee to operate a Burros Fries business according to the franchise agreement and manuals. It should also state that the site will be used only for a Burros Fries business and prevent the franchisee from assigning or modifying lease rights or extending the term without prior written consent from Burros Fries. Additionally, the lessor must provide Burros Fries with copies of any default notices sent to the franchisee and allow Burros Fries the right to cure any default within fifteen days after the franchisee's cure period expires.
Furthermore, the lease must grant Burros Fries the right to take assignment and possession of the business without the lessor's consent or additional consideration. If Burros Fries exercises this right and the franchisee is in good standing, Burros Fries will sign a sublease with the franchisee at the same rent the franchisee was paying. However, Burros Fries will not be liable for any obligations incurred before their occupancy. The franchisee must take necessary actions to accomplish the assignment and sign a Collateral Assignment of Lease. If the franchisee loses lease rights due to bankruptcy, the lessor must enter into a new lease with Burros Fries on similar terms if requested.