Does C3 Wellness Spa review the terms of the lease for the Spa Location?
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, C3 Wellness Spa does not review the lease terms for the franchisee's spa location. Instead, C3 Wellness Spa requires that the landlord acknowledge C3 Wellness Spa's rights as outlined in the Lease Agreement Rider, which is attached as Exhibit 4 to the Franchise Agreement. Additionally, the franchisee must collaterally assign the lease to C3 Wellness Spa, as detailed in the Collateral Assignment of Lease attached as Exhibit 5 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 substantially the form set forth in Exhibit 4 to the Franchise Agreement. The Lease Agreement Rider is designed to grant C3 Wellness Spa certain rights, including the right to be notified in the event of a lease default and the potential right for C3 Wellness Spa to enter the premises of the spa location.
This arrangement means that while C3 Wellness Spa does not directly negotiate or approve the financial or operational terms of the lease, they maintain control over the lease through the Lease Agreement Rider and the Collateral Assignment of Lease. This protects C3 Wellness Spa's interests in the event of a franchisee default or other lease-related issues. Prospective franchisees should carefully review Exhibits 4 and 5 to fully understand the implications of these requirements and how they might affect their rights and obligations under the lease.