What must a transferee agree to regarding the lease of the Burros Fries business from the original franchisee?
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:
-
- Permit Franchisee to operate a Burros & Fries Business in accordance with this Agreement and the Manuals;
-
- 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;
-
- 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;
-
- 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 is not allowed to execute a lease or sublease for the business, or make any modifications or amendments to the lease or sublease, without prior written consent from Burros Fries. This consent may be granted, conditioned, or withheld based on Burros Fries's business judgment. The franchisee must provide Burros Fries with a copy of any lease or sublease for review at least ten days before it is signed and must deliver a copy of the signed lease or sublease within five business days after signing.
The lease or sublease for the Burros Fries business must include specific provisions. First, it must permit the franchisee to operate a Burros Fries business in accordance with the Franchise Agreement and the manuals. Second, it must state that the site will be used only for the operation of a Burros Fries business. The franchisee is prohibited from assigning or modifying any lease rights, or extending the term, without Burros Fries's prior written consent.
Third, the lease must require the lessor to provide Burros Fries with a copy of any written notices of default to the franchisee under the lease. It must also give Burros Fries the right to cure any default if it chooses, within fifteen days following the expiration of the franchisee's cure period under the lease. Finally, the lease must provide Burros Fries with the right to take assignment and possession of the business, without the lessor's consent or any additional consideration. If Burros Fries exercises this right and the franchisee is in good standing, Burros Fries will sign a sublease with the franchisee for the same rent the franchisee is paying. Burros Fries will not have any liability for obligations incurred prior to its occupancy. The franchisee must take necessary actions to accomplish such assignment and sign the Collateral Assignment of Lease attached as Schedule 6 when signing the Franchise Agreement. If the franchisee loses lease rights due to bankruptcy, the lessor will, upon Burros Fries's request, enter into a new lease with Burros Fries on essentially the same terms as the terminated lease.