If the Franchisee or an affiliate of Franchisee is the titleholder of the Business Location, under what condition does Byrider have the right to enter into a lease for the Business Location?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event Franchisee or its affiliate owns the approved Business Location, Franchisee agrees that upon termination of this Agreement by Company due to Franchisee's breach or termination by Franchisee without cause prior to the scheduled expiration according to 5.1 herein, Franchisee or its affiliate will, at Company's election, lease the Business Location to Company or its affiliate at market rent for a term of two (2) years.
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, if the franchisee or an affiliate owns the business location, Byrider has the right to lease the location under specific conditions. This right is triggered if the franchise agreement is terminated either due to the franchisee's breach or if the franchisee terminates the agreement without cause before its scheduled expiration, as outlined in section 5.1 of the agreement.
In such instances, Byrider can elect to lease the business location from the franchisee or their affiliate. The lease would be at market rent and would be for a term of two years. This provision ensures that Byrider can maintain control over the location and continue operations, even if the original franchisee is no longer operating the business.
This condition is important for prospective franchisees to consider, especially if they plan to purchase the real estate for their Byrider location through a related entity. It means that in the event of a dispute leading to termination or an early, unapproved exit from the franchise agreement, the franchisee could be compelled to lease the property to Byrider at market rates for two years, potentially impacting their long-term investment strategy for the property.