Is the Tenant or another franchisee released from liability if they assign the lease for a Byrider franchise?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
Landlord, Tenant and Franchisor agree and acknowledge that simultaneously with such assignment pursuant to the immediately preceding sentence, Franchisor shall be released from all liability under the Lease or otherwise accruing after the date of such assignment (in the event Franchisor is acting as the assignor under such assignment), but neither Tenant nor any other franchisee shall be afforded such release in the event Tenant/such franchisee is the assignor unless otherwise agreed by Landlord.
Source: Item 22 — Contracts (FDD pages 87–88)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, when a lease is assigned, Byrider Franchising Partners, LLC, as the Franchisor, is released from liability under the lease after the assignment date if they are the assignor. However, neither the Tenant (the original franchisee) nor any other franchisee is released from liability if they are the assignor, unless the Landlord agrees to it. This means that if a Byrider franchisee assigns their lease to another party, they generally remain responsible for the lease obligations unless they obtain explicit consent from the Landlord to be released.
This condition protects the Landlord by ensuring continued financial responsibility for the lease, even if the business changes hands. For a prospective Byrider franchisee, this implies that they should carefully consider the terms of their lease and the potential difficulties of assigning it in the future. They should also negotiate with the Landlord to include a clause that releases them from liability upon assignment, if possible.
It is important for a potential Byrider franchisee to understand that lease assignments and releases from liability are subject to the Landlord's approval. This is a common practice in franchising, as landlords want to ensure the financial stability and operational competence of the tenant occupying their property. Therefore, franchisees should seek legal counsel to review the lease agreement and understand their rights and obligations regarding lease assignments and potential liabilities.