Is Cd One Price Cleaners obligated to assume the lease upon the franchisee's default?
Cd_One_Price_Cleaners Franchise · 2025 FDDAnswer from 2025 FDD Document
You and the landlord must sign our Rider to Lease and Collateral Assignment (Exhibit B to the Franchise Agreement) which modifies certain terms of the lease and under which we have the right, but not the obligation, to assume the lease upon your default.
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 33–47)
What This Means (2025 FDD)
According to the 2025 Cd One Price Cleaners Franchise Disclosure Document, Cd One Price Cleaners is not obligated to assume the lease upon a franchisee's default. The FDD states that the franchisee and the landlord must sign a Rider to Lease and Collateral Assignment, which gives Cd One Price Cleaners the right, but not the obligation, to assume the lease if the franchisee defaults.
This means that if a Cd One Price Cleaners franchisee fails to meet their lease obligations and defaults, Cd One Price Cleaners has the option to take over the lease but is not required to do so. This protects Cd One Price Cleaners from being forced to assume financial responsibility for a struggling or failed franchise location.
For a prospective franchisee, this is an important consideration. While Cd One Price Cleaners's option to assume the lease could potentially save a location, it also means that the franchisee bears the full risk of the lease obligation. If the business fails, the franchisee remains responsible for the remaining lease payments unless Cd One Price Cleaners chooses to step in, which they are not obligated to do.