What are the conditions under which a Byrider franchisee can assign their Franchise Agreement (as implied by obligations in Item 9) and how does this relate to the initial franchise fee (Item 5)?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
provisions of this Rider and the provisions of the Lease, this Rider shall govern and control.
- Consent to Collateral Assignment to Franchisor; Disclaimer. Landlord acknowledges that Tenant intends to operate a Byrider business at the Premises, and that Tenant's rights to operate a Byrider business and to use the Byrider® name, trademarks and service marks are solely pursuant to a franchise agreement ("Franchise Agreement'') between Tenant and Byrider Franchising Partners, LLC ("Franchisor"). Tenant's operations at the Premises are independently owned and operated. Landlord acknowledges that Tenant alone is responsible for all obligations under the Lease unless and until Franchisor or another franchisee expressly, and in writing, assumes such obligations and takes actual possession of the Premises. Notwithstanding any provisions of this Lease to the contrary, Landlord hereby consents, without payment of a fee and without the need for further Landlord consent, to (i) the collateral assignment of Tenant's interest in this Lease to Franchisor to secure Tenant's obligations to Franchisor under the Franchise Agreement, and/or (ii) Franchisor's succeeding to Tenant's interest in the Lease as a result of Franchisor's exercise of rights remedies under such collateral assignment or as a result of Franchisor's termination of the Franchise Agreement due to Franchisee's breach or termination of the Franchise Agreement by Franchisee without cause, or Franchisor's exercise of rights or remedies granted in or under, any other agreement between Franchisor and Tenant, and/or (iii) Tenant's, Franchisor's and/or any other franchisee of Franchisor's assignment of the Lease to another franchisee of Franchisor with whom Franchisor has executed its then-standard franchise agreement.
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, Item 22 discusses conditions related to the assignment of a lease, which is relevant to the operation of a Byrider franchise. Specifically, the landlord consents to the collateral assignment of the tenant's (franchisee's) interest in the lease to Byrider Franchising Partners to secure the franchisee's obligations under the Franchise Agreement. This means that Byrider has the right to step in and take over the lease if the franchisee fails to meet their obligations. Additionally, the landlord consents to Byrider succeeding to the tenant's interest in the lease if Byrider terminates the Franchise Agreement due to the franchisee's breach or termination without cause, or if Byrider exercises its rights under any agreement with the tenant.
Furthermore, the landlord agrees to the assignment of the lease to another Byrider franchisee with whom Byrider has a standard franchise agreement. This indicates that a franchisee can transfer their lease to another franchisee, subject to Byrider's approval and the existence of a standard franchise agreement with the new franchisee. This clause facilitates the transfer of the business location to a new operator within the Byrider system. The initial franchise fee, which is a $60,000 lump sum, is not directly mentioned in relation to the assignment of the Franchise Agreement in this section. However, the ability to assign the lease to another franchisee could be a factor that affects the value of the franchise if the franchisee decides to sell the business.
In summary, while the initial franchise fee of $60,000 is a separate payment made when signing the Franchise Agreement, the conditions under which a franchisee can assign their lease are outlined in Item 22. These conditions include Byrider's right to collateral assignment, Byrider's succession to the lease upon termination, and the ability to assign the lease to another franchisee with Byrider's approval. These provisions ensure that Byrider maintains control over the location and can facilitate the transfer of the business to a new franchisee if necessary.