Does the Chem Dry Collateral Assignment specify any prohibited actions by the Franchisee regarding the Lease that would trigger the Franchisor's rights?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
-
- No Subordination: Franchisee shall not permit the Lease to become subordinate to any lien without first obtaining Franchisor's written consent, other than the lien created by this Assignment, the Franchise Agreement, the Lessor's lien under the Lease, liens securing bank financing for the operations of Franchisee on the Site and the agreements and other instruments referenced herein.
The Franchisee will not terminate, modify or amend any of the provisions or terms of the Lease without the prior written consent of the Franchisor.
Any attempt at termination, modification or amendment of any of the terms of the Lease without such written consent is null and void.
-
- Exercise of Remedies: In any case of default by the Franchisee under the terms of the Lease or under the Franchise Agreement, Franchisor shall be entitled to exercise any one or more of the following remedies in its sole discretion:
a) to take possession of the Site, or any part thereof, personally, or by its agents or attorneys;
b) to, in its discretion, without notice and with or without process of law, enter upon and take and maintain possession of all or any part of the Site, together with all furniture, fixtures, inventory, books, records, papers and accounts of the Franchisee;
Source: Item 22 — CONTRACTS (FDD page 68)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, the Collateral Assignment specifies certain prohibited actions by the franchisee regarding the lease. Specifically, the franchisee is not allowed to permit the lease to become subordinate to any lien without Chem Dry's written consent, with some exceptions. These exceptions include the lien created by the assignment itself, the lessor's lien under the lease, liens securing bank financing for the franchisee's operations at the site, and other referenced agreements and instruments.
Additionally, the Chem Dry franchisee is prohibited from terminating, modifying, or amending any of the provisions or terms of the lease without obtaining prior written consent from Chem Dry. Any attempt to terminate, modify, or amend the lease without this written consent will be considered null and void.
In the event of a default by the franchisee under the terms of the lease or the Franchise Agreement, Chem Dry is entitled to exercise several remedies at its discretion. These include taking possession of the site, entering and maintaining possession of the site with all its contents, excluding the franchisee from the site, and acting as the franchisee's attorney-in-fact to manage and control the franchised business. Chem Dry can also cancel unauthorized agreements or subleases entered into by the franchisee and disaffirm any unauthorized agreement, sublease, or subordinated lien.