In the context of a C3 Wellness Spa lease, who are the parties involved in the lease agreement?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
Assignor represents that Assignor possesses full power and authority to enter into this Assignment and that at no time prior to executing this Assignment has Assignor assigned and/or transferred Assignor's interests and/or rights in or to the Lease and/or the Leased Premises.
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.
Assignor agrees that Assignor will not and shall not permit, grant or suffer any termination, surrender or modification of the Lease without the prior written consent of Assignee. Throughout the term of the
Franchise Agreement, Assignor shall elect and exercise all options to extend the terms of or renew the Lease not less than 120 days prior to the last day that the option must be exercised unless Assignee otherwise agrees in writing. Should Assignor fail to comply with the foregoing, Assignor does hereby appoint Assignee (subject to Assignees acceptance and invocation of such right) to act on behalf of Assignor for the purpose of effectuating extensions and renewals of the Lease.
Source: Item 23 — RECEIPTS (FDD pages 59–293)
What This Means (2024 FDD)
According to the 2024 C3 Wellness Spa Franchise Disclosure Document, the lease agreement for a C3 Wellness Spa location typically involves the Assignor (the franchisee) and the Assignee (Aryes Franchising LLC, the franchisor). The franchisee, as the Assignor, initially enters into a lease agreement with a landlord for the premises. Subsequently, the franchisee may be required to execute a Collateral Assignment of Lease, effectively assigning certain rights and interests in the lease to the franchisor. This assignment provides the franchisor with certain protections and rights related to the lease.
The franchisor, as the Assignee, does not become a direct party to the original lease agreement between the franchisee and the landlord. However, the franchisor gains certain rights through the assignment, such as the ability to take possession of the leased premises and terminate the franchisee's rights under the lease under specific conditions. These conditions include defaults by the franchisee under the lease, defaults under the Franchise Agreement, or the expiration or termination of the Franchise Agreement. The franchisor's rights are contingent upon the franchisee's compliance with the terms of both the lease and the Franchise Agreement.
This arrangement is common in franchising to protect the franchisor's interests and ensure continuity of the C3 Wellness Spa business at the location. By having the right to assume the lease, the franchisor can maintain control over the location and potentially transfer it to another franchisee if the original franchisee defaults or leaves the system. The franchisee is restricted from terminating, surrendering, or modifying the lease without the franchisor's written consent, further safeguarding the franchisor's interests. The franchisee must also exercise all options to extend or renew the lease at least 120 days before the option expires, unless the franchisor agrees otherwise in writing, and failure to do so allows the franchisor to act on behalf of the franchisee to effectuate such extensions or renewals.