What agreement's termination will cause the C3 Wellness Spa sublease to terminate?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
Assignee has the right and possesses full power and authority to take possession of the Leased Premises, to eject and expel Assignor from possession and occupancy of the Leased Premises and to terminate Assignor's right, title and interest in and to the Lease in the event of: (a) a default by Assignor under the terms of the Lease and Assignor's failure to timely cure such default, assuming that such default is capable of curing; (b) a default by Assignor (in Assignor's capacity as an C3 Wellness franchisee) under the terms and conditions of the C3 Wellness Franchise Agreement between Assignor, as franchisee, and Assignee, as franchisor (the "Franchise Agreement"), and Assignor's failure to timely cure such default, assuming that such default is capable of curing; (c) upon default of any agreement supporting or guaranteeing the Franchise Agreement; or (d) the expiration or termination of the Franchise Agreement.
Source: Item 23 — RECEIPTS (FDD pages 59–293)
What This Means (2024 FDD)
According to the 2024 C3 Wellness Spa Franchise Disclosure Document, the termination of the Franchise Agreement between the franchisee (Assignor) and C3 Wellness Spa (Assignee) will result in the termination of the sublease. Specifically, if the franchisee defaults under the Franchise Agreement and fails to cure the default, or upon the expiration or termination of the Franchise Agreement itself, C3 Wellness Spa has the right to take possession of the leased premises and terminate the franchisee's rights to the lease.
This provision protects C3 Wellness Spa by ensuring that the franchised location remains under their control if the franchisee violates the Franchise Agreement or the agreement ends. It allows C3 Wellness Spa to maintain the integrity of the franchise system and continue operations at that location, either directly or through another franchisee.
For a prospective franchisee, this means that maintaining compliance with the Franchise Agreement is critical not only for the operation of the C3 Wellness Spa business but also for retaining the lease on the premises. Failure to comply with the Franchise Agreement could result in losing both the franchise and the location. The franchisee should carefully review the terms of the Franchise Agreement and the lease to fully understand their obligations and the potential consequences of default or termination.