Under what conditions will the C3 Wellness Spa Sublease automatically terminate?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
| 1. | Parties. This Sublease Agreement ("Sublease"), dated to be effective as of |
|---|---|
| ("Effective Date"), is made between [Franchisee MSO Entity] ("Sublandlord") and [Medical | |
| Entity] ("Subtenant"). Unless otherwise defined in this Sublease, capitalized terms have the | |
| meanings set forth in the Office Lease Agreement between Landlord (defined below) and | |
| Sublandlord dated ("Master Lease"). | |
| 2. | Premises. Sublandlord subleases to Subtenant on the terms and conditions set forth in this Sublease |
| the | |
| exclusive | |
| right | |
| to | |
| use | |
| certain | |
| designated | |
| space | |
| Sublandlord | |
| is | |
| leasing | |
| from | |
| ("Landlord"), located at ("Premises") | |
| comprising rentable square feet on the Premises ("Sublease Premises"). | |
| 3. | As-Is. Subtenant specifically agrees that the Sublease Premises is being sublet by Sublandlord to |
| Subtenant in its "As-Is" condition and with no obligation for Sublandlord to make any | |
| improvements to the Sublease Premises or otherwise maintain or repair the Sublease Premises. | |
| 4. | Term and Conditions Precedent. Subject to the terms in this Agreement, the "Term" of this |
| Sublease shall commence on the Effective Date, and end on termination of the Management | |
| Services Agreement, unless otherwise terminated as set forth below ("Termination Date"). | |
| Possession of the Sublease Premises ("Possession") shall be delivered to Subtenant on the | |
| commencement of the Term. In the event of the termination of Sublandlord's interest as Tenant | |
| under its Lease of Premises with Landlord, or the termination of the Management Services | |
| Agreement for any reason, then this Sublease will terminate automatically upon such termination | |
| without any liabilit |
Source: Item 23 — RECEIPTS (FDD pages 59–293)
What This Means (2024 FDD)
According to C3 Wellness Spa's 2024 Franchise Disclosure Document, the Sublease agreement between the Sublandlord (Franchisee MSO Entity) and Subtenant (Medical Entity) will automatically terminate under specific conditions. The term of the Sublease commences on the Effective Date and ends on the termination of the Management Services Agreement, unless otherwise terminated as set forth in the agreement.
The C3 Wellness Spa Sublease will automatically terminate without any liability if the Sublandlord's interest as a tenant under its lease of premises with the Landlord is terminated. Similarly, the Sublease will also automatically terminate if the Management Services Agreement is terminated for any reason.
This means that a C3 Wellness Spa franchisee's right to operate in the subleased premises is contingent upon the continuation of both the head lease between the Sublandlord and the Landlord, and the Management Services Agreement. If either of these agreements is terminated, the franchisee's Sublease will automatically end, potentially disrupting their business operations. Prospective franchisees should carefully review the terms of both the Master Lease and the Management Services Agreement to understand the conditions under which they could be terminated, and assess the potential risks associated with these termination clauses.