What happens to the lease if the Franchise Agreement for a Chatime store is terminated?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
related components of Franchisor's proprietary system. Landlord further acknowledges that during the term of this Lease or any extension thereof, Landlord will not lease space to another business in the same building, shopping center or facility as the Leased Premises which serves primarily bubble tea or other specialized tea drinks.
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- Termination of the Franchise Agreement. If the Franchise Agreement between Franchisor and Tenant is terminated for any reason during the term of the Lease or any extension thereof,
Tenant, upon the written request of Franchisor, shall and does hereby assign to Franchisor all of its rights, title and interest in and to the Lease, and Franchisor or any affiliate designated by Franchisor may agree to assume from the date of assignment all of Tenant's obligations remaining under the Lease, and may assume Tenant's occupancy rights, and the right to sublease the premises, for the remainder of the term of the Lease. If Franchisor elects to accept the assignment of the Lease from Tenant, it shall give Tenant and Landlord written notice of its election to acquire the leasehold interest. Landlord hereby consents to the assignment of the Lease from Tenant to Franchisor and shall not charge any fee or accelerate rent under the Lease. Alternatively, in the event of a termination of the Franchise Agreement, Franchisor may elect to enter into a new lease with Landlord containing terms and conditions no less favorable than the Lease. Upon Landlord's receipt of written notice from Franchisor advising Landlord that Franchisor elects to enter into a new lease, Landlord shall execute and deliver such new lease to Franchisor for its acceptance. Landlord and Tenant shall deliver possession of the Leased Premises to Franchisor, free and clear of all rights of Tenant or third parties, subject to Franchisor executing an acceptance of the assignment of Lease or new lease, as the case may be.
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- Tenant's Agreement to Vacate Leased Premises.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the lease agreement for a Chatime store is affected if the Franchise Agreement is terminated. Specifically, if the Franchise Agreement between Chatime and the tenant is terminated for any reason during the term of the lease, Chatime has certain rights regarding the lease.
Chatime has the option to request that the tenant assign all rights, title, and interest in the lease to Chatime. Chatime or its designated affiliate can then assume the tenant's obligations and occupancy rights for the remainder of the lease term. The landlord's consent to this assignment is required, and they are not permitted to charge any fees or accelerate rent as a result of the assignment. Alternatively, Chatime can elect to enter into a new lease with the landlord under terms and conditions no less favorable than the original lease.
Upon receiving written notice from Chatime about its decision to enter into a new lease, the landlord is obligated to execute and deliver the new lease to Chatime for acceptance. The tenant and landlord must deliver possession of the leased premises to Chatime, ensuring it is free of any rights of the tenant or third parties. This is contingent upon Chatime accepting the assignment of the lease or the new lease. The tenant is also required to vacate the leased premises promptly and remove their personal property upon termination of the Franchise Agreement, subject to Chatime's right to acquire such property under the Franchise Agreement. Any property left behind by the tenant will be considered abandoned.