What rights does C3 Wellness Spa have as a third-party beneficiary regarding the lease and leased premises?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
he landlord for the Leased Premises, is delivered by Assignee to Assignor and the landlord for the Leased Premises, is signed by an officer of Assignee, and that expressly states that Assignee is assuming all rights and interests in and to the Lease pursuant to this Assignment; and (b) Assignee takes possession of the Leased Premises pursuant to the terms hereof, and Assignee assumes the obligations of Assignor under the Lease.
Assignor represents that Assignor possesses full power and authority to enter into this Assignment and that at no time prior to executing this Assignment has Assignor assigned and/or transferred Assignor's interests and/or rights in or to the Lease and/or the Leased Premises.
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, C3 Wellness Spa, as the franchisor, has specific rights regarding the lease and leased premises of a franchisee's location. As a third-party beneficiary, C3 Wellness Spa has the right to take possession of the leased premises and terminate the franchisee's rights to the lease under certain conditions. These conditions include a default by the franchisee under the lease terms, a default under the C3 Wellness Spa Franchise Agreement, default of any agreement supporting or guaranteeing the Franchise Agreement, or the expiration or termination of the Franchise Agreement.
C3 Wellness Spa also has the right to prevent the franchisee from terminating, surrendering, or modifying the lease without prior written consent from C3 Wellness Spa. The franchisee must elect and exercise all options to extend or renew the lease at least 120 days before the option's deadline, and if the franchisee fails to do so, C3 Wellness Spa has the right to act on behalf of the franchisee to effectuate these extensions or renewals. This ensures that the location remains secured for continued operation under the C3 Wellness Spa brand.
Furthermore, C3 Wellness Spa has the option, but not the obligation, to assume or renew the lease and occupy the leased premises. This includes the right to sublease the premises to another C3 Wellness Spa franchisee. If C3 Wellness Spa assumes the lease, it will not be obligated to pay the landlord more than two months of past due rent, real estate taxes, and common area maintenance charges. The landlord's consent is not required for C3 Wellness Spa to assume or assign the lease, and no assignment fees or rent increases can be imposed as a result. These rights protect C3 Wellness Spa's interests in maintaining consistent brand presence and operational control within its franchise system.