Is a security deposit required for the C3 Wellness Spa Sublease?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
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 franchisor has the option to assume or renew the lease of the premises. If the franchisor assumes the lease, they are not obligated to pay the landlord more than two months of past due rent, real estate taxes, and common area maintenance charges.
Furthermore, if C3 Wellness Spa assigns the lease to a new franchisee approved by the landlord, the franchisor will not be responsible for any obligations, debts, liabilities, or payments arising after the assignment date. The landlord's consent is not required for the assignment or assumption of the lease by the franchisor, and no assignment fee or rent increase will result from such actions.
However, the FDD does not explicitly state whether a security deposit is required for a sublease. A prospective franchisee should clarify with C3 Wellness Spa under what conditions a security deposit is required, who holds the deposit, and what the terms are for its return.