Does the Lease Agreement Rider for C3 Wellness Spa specify any conditions under which it can be terminated?
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.
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 Rider itself is not quoted, but the document refers to conditions under which the Assignee (C3 Wellness Spa) can terminate the Assignor's (the franchisee) rights to the lease. Specifically, C3 Wellness Spa, as the Assignee, can terminate the franchisee's lease rights if the franchisee defaults on the lease terms and fails to cure the default, defaults on the C3 Wellness Spa Franchise Agreement and fails to cure, defaults on any agreement supporting or guaranteeing the Franchise Agreement, or upon the expiration or termination of the Franchise Agreement.
This arrangement is implemented through a Collateral Assignment of Lease, where the franchisee assigns their lease to C3 Wellness Spa as collateral. This gives C3 Wellness Spa significant control over the lease, ensuring that the franchisee operates the C3 Wellness Spa location in accordance with the franchise agreement. The franchisee cannot terminate, surrender, or modify the lease without C3 Wellness Spa's written consent.
Furthermore, the franchisee must exercise all lease renewal options at least 120 days before the option deadline, unless C3 Wellness Spa agrees otherwise in writing. If the franchisee fails to do so, C3 Wellness Spa has the right to act on behalf of the franchisee to extend or renew the lease. This protects C3 Wellness Spa's interest in maintaining the location for continued operation of the franchise.