factual

What is the Practice's obligation regarding the use of Medical Equipment leased from C3 Wellness Spa?

C3_Wellness_Spa Franchise · 2024 FDD

Answer from 2024 FDD Document

a party commences an action against the other arising out of or in connection | | | with this Sublease, the prevailing party is be entitled to recover its costs of suit and reasonable | | | attorneys' fees. | | 12. | Agency Disclosure. Sublandlord and Subtenant each warrant that they have dealt with no real |

estate broker in connection with this transaction.

13. Notices. All notices and demands by either party on the other hereunder must be in writing.
The undersigned have executed this Sublease duly authorized to be effective as of the Effective Date.
SUBLANDLORD SUBTENANT
[Franchisee MSO Entity] [Medical Entity]
By: By:
[Name, Title] [Name, Title]

Schedule B(e) Medical Equipment Lease Terms

1.01. Medical Equipment. Manager is the owner and/or lessee of certain medical equipment located at Practice ("Medical Equipment"). Practice has examined the Medical Equipment and determined that the Medical Equipment is necessary and appropriate for the provision of Practice's professional medical services.

1.02. General Lease Terms.

  • (a) Grant of Lease. During the Term, provided Practice remains in compliance with the terms of this Agreement, Manager agrees to the exclusive, full-time lease of the Medical Equipment to Practice in accordance with the terms of this Agreement and, more specifically, this Schedule B(e). Practice will use the Medical Equipment in a careful and proper manner and will comply with and conform to all applicable laws, ordinances, and regulations in any way relating to the possession, use, or maintenance of the Medical Equipment. All rights, titles and interest in and to the Medical Equipment, including any custom development or modifications, is the exclusive property of Manager. Practice covenants and agrees that it will not take any action or assist any third party in any action that may impair Manager's ownership rights to the Medical Equipment.
  • (b) Warranty Limitation. MANAGER MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THIS SCHEDULE B(E), INCLUDING THE MEDICAL EQUIPMENT, AND PRACTICE EXPRESSLY WAIVES AND MANAGER DISCLAIMS ALL SUCH REPRESENTATIONS AND WARRANTIES, INCLUDING ANY WITH RESPECT TO TITLE, NON-INFRINGEMENT, MERCHANTABILITY, VALUE, RELIABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, PRACTICE'S USE OF THE MEDICAL EQUIPMENT IS AT ITS OWN RISK ON AN "AS IS" BASIS.
  • (c) Repairs and Maintenance. Practice, at its own cost and expense, will keep the Medical Equipment in good repair, condition, and working order and pay for regular cleaning and preventative maintenance during the Term and until Practice delivers the Medical Equipment to Manager in the same condition it was in when delivered to Practice, normal wear and tear excepted.
  • (d) Taxes. Practice will keep the Medical Equipment free and clear of all levies, liens, and encumbrances. Practice, or Manager as a Practice Expense, will report, pay and discharge when due all license and registration fees, assessments, sales, use and property taxes, gross receipts, taxes arising out of receipts from use or operation of the Medical Equipment, and other taxes, fees and governmental charges similar or dissimilar to the foregoing, together with any penalties or interest, imposed by any state, federal or local government or any agency, or department upon the Medical Equipment or the use, operation, or leasing of the Medical Equipment or otherwise in any manner and whether or not the same will be assessed against or in the name of Manager or Practice. However, Practice will not be required to pay or discharge any such tax or assessment so long as it will contest, in good faith and by appropriate legal proceedings, the validity of such proceedings in any reasonable manner which will not affect or endanger the title and interest of Manager to the Medical Equipment. Practice will, however, reimburse Manager for any damages or expenses resulting from such failure to pay or discharge. In case of failure of Practice to pay fees, assessments, charges and taxes, all as specified in this Agreement, Manager will have the right, but not the obligation, to pay such fees, assessments, charges and taxes, as the case may be. In that event, Practice will promptly reimburse Manager for such costs in accordance with this Agreement.

  • (e) Insurance; Risk of Loss. During the Term, Practice must maintain insurance coverage for the full value of the Medical Equipment and insurance coverage against liability for bodily injury, including death, and property damage arising out of the ownership, maintenance, use and operation of the Medical Equipment with limits acceptable to Manager. Practice must ensure the policies name Manager as additional insured and provide a waiver of subrogation in favor of Manager. Such coverage must be in a form acceptable to Manager and Practice must deliver all policies of insurance, or evidence satisfactory to Manager of such coverage, upon Manager's request. Practice's insurer must agree, by endorsement upon the policy issued by it, or by an independent document provided to Manager, that it will give Manager 30 days prior written notice of the effective date of any alteration or cancellation of such policy and that such notice will be sent to Manager via certified mail, return receipt requested at the address in this Agreement. Except as otherwise provided in this Agreement, Practice assumes the risk of loss of, or damage to the Medical Equipment from any and every cause whatsoever, including, but not limited to, casualty, collision, upset, fire, theft, malicious mischief, vandalism, graffiti, glass breakage, and mysterious disappearance.
  • 1.03.

Source: Item 23 — RECEIPTS (FDD pages 59–293)

What This Means (2024 FDD)

According to the 2024 C3 Wellness Spa Franchise Disclosure Document, if a franchisee (referred to as "Practice") leases medical equipment from the Manager (likely an affiliate of C3 Wellness Spa), the franchisee has several obligations. The franchisee must use the medical equipment in a careful and proper manner, adhering to all relevant laws and regulations. The franchisee acknowledges that the Manager retains exclusive ownership of the equipment, including any modifications made to it, and agrees not to take any action that could impair the Manager's ownership rights.

The franchisee is responsible for maintaining the medical equipment in good repair and working order, covering the costs of regular cleaning and preventative maintenance throughout the lease term. The equipment must be returned to the Manager in the same condition it was received, with allowances for normal wear and tear. The franchisee is also responsible for keeping the medical equipment free of any levies, liens, or encumbrances and for paying all related taxes, fees, and governmental charges associated with the equipment's use, operation, or leasing.

Furthermore, the franchisee is obligated to maintain insurance coverage for the full value of the medical equipment, as well as liability insurance for bodily injury and property damage arising from its use. These insurance policies must name the Manager as an additional insured and include a waiver of subrogation in favor of the Manager. The franchisee bears the risk of loss or damage to the medical equipment from any cause, including casualty, fire, theft, or vandalism. These obligations continue even after the agreement expires or terminates, specifically regarding amounts due and the terms related to warranty limitations and insurance/risk of loss, which survive for five years.

C3 Wellness Spa does not provide any warranties, either express or implied, regarding the medical equipment's title, non-infringement, merchantability, value, reliability, or fitness for a particular purpose. The franchisee uses the equipment at its own risk on an "AS IS" basis. The lease of medical equipment must comply with all applicable laws, including Medicare/Medicaid fraud and abuse statutes and Federal Stark and Anti-Kickback laws. The rent must reflect fair market value in an arm's-length transaction, and no part of the consideration can be intended to induce referrals between the parties.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.