What is the 'Lease' referred to in the Lease Agreement Rider for C3 Wellness Spa?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
"Collateral Assignment of Lease" refers to and means the Collateral Assignment of Lease agreement attached to this Agreement as Exhibit 5.
"Lease Agreement Rider" refers to and means the form "Lease Agreement Rider" attached to this Agreement as Exhibit 4.
Franchisor will have the option, but not the obligation, to assume or renew the Lease and the occupancy of the Leased Premises, including the right to sublease to another Franchisee of the C3 Wellness Franchise System, for all or any part of the remaining term of the Lease and, in connection with said assumption, Franchisor will not be obligated to pay to Landlord more than two months past due rent, real estate taxes and common area maintenance charges. In the event Franchisor assumes Tenant's leasehold interest in the Lease pursuant to the terms of this Agreement and subsequently assigns the Lease and its leasehold interest to an C3 Wellness franchisee approved by Landlord, Franchisor shall not be responsible for any obligations, debts, liabilities or payments arising and/or accruing under the Lease after the effective date of such assignment. Landlord agrees that any assignment of the Lease and Tenant's leasehold interests in the Lease by Tenant to Franchisor and/or assumption by Franchisor of the Lease and such leasehold interests shall not require Landlord consent and shall not require any payment of any assignment fee or similar charge or result in any increase in rent or other fees as a result of such assignment and/or assumption.
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' refers to the specific form attached to the Franchise Agreement as Exhibit 4. This rider likely contains additional terms and conditions that modify or supplement the standard lease agreement a franchisee would enter into for their spa location.
Additionally, the FDD mentions a 'Collateral Assignment of Lease' which is defined as the agreement attached as Exhibit 5 to the Franchise Agreement. This suggests that C3 Wellness Spa franchisees may be required to provide a collateral assignment of their lease to the franchisor, giving the franchisor certain rights related to the lease in specific situations.
Furthermore, the document states that C3 Wellness Spa franchisor has the option, but not the obligation, to assume or renew the lease for the premises. This includes the right to sublease the premises to another franchisee within the C3 Wellness Spa system. If the franchisor assumes the lease, they are only obligated to pay up to two months of past due rent, real estate taxes, and common area maintenance charges. The landlord's consent is not required for the assignment or assumption of the lease by the franchisor, nor can the landlord impose assignment fees or rent increases as a result.