What exhibit to the Franchise Agreement contains the Collateral Assignment of Lease for C3 Wellness Spa?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
- Lease – We do not review the terms of the lease for your Spa Location but require that your landlord acknowledge our rights as set forth in the lease agreement rider attached as Exhibit 4 to the Franchise Agreement (the "Lease Agreement Rider") and that you collaterally assign the lease to us as set forth in the collateral assignment of lease attached as Exhibit 5 to the Franchise Agreement (the "Collateral Assignment of Lease"). We possess the right to disapprove of a proposed lease if the landlord refuses to sign the Lease Agreement Rider in substantially the form set forth in Exhibit 4 to the Franchise Agreement. The Lease Agreement Rider is intended to afford us certain rights including our right to be notified in the event of a lease default and, potentially, for us to enter the premises of your Spa Location.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 25–29)
What This Means (2024 FDD)
According to C3 Wellness Spa's 2024 Franchise Disclosure Document, the Collateral Assignment of Lease is attached as Exhibit 5 to the Franchise Agreement. C3 Wellness Spa requires franchisees to collaterally assign their lease to them. This gives C3 Wellness Spa certain rights regarding the leased property.
Specifically, C3 Wellness Spa requires that the landlord acknowledge their rights as outlined in the lease agreement rider, which is attached as Exhibit 4 to the Franchise Agreement. C3 Wellness Spa retains the right to disapprove a proposed lease if the landlord refuses to sign the Lease Agreement Rider in the form presented in Exhibit 4.
The Lease Agreement Rider is designed to provide C3 Wellness Spa with specific rights, including the right to be notified if the franchisee defaults on the lease. It also potentially allows C3 Wellness Spa to enter the premises of the franchisee's spa location under certain circumstances. This arrangement protects C3 Wellness Spa's interests in maintaining the franchise location and continuing operations, even if the franchisee faces difficulties.