What is the document called that Chem Dry Franchisees must sign to assign their lease?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
Exhibit G-5
EXHIBIT H TO THE FRANCHISE AGREEMENT
COLLATERAL ASSIGNMENT AND ASSUMPTION OF LEASE
THIS COLLATERAL ASSIGNMENT AND ASSUMPTION OF LEASE made, entered into and effective on (the "Effective Date") by and between: (i) (the "Franchisor"); and (ii) (the "Franchisee"). (this "Assignment") is BACKGROUND INFORMATION The Franchisor entered into that certain Franchise Agreement (the "Franchise Agreement") dated (the "Franchised Business") located at as of with the Franchisee, pursuant to which the Franchisee plans to own and operate a franchised business (the "Site"). In addition, pursuant to that certain Lease Agreement (the "Lease"), the Franchisee has leased or will lease certain space containing the Franchised Business The Franchise Agreement requires the described therein from (the "Lessor"). Franchisee to deliver this Assignment to the Franchisor as a condition to the grant of a franchise. OPERATIVE TERMS The Franchisor and the Franchisee agree as follows:
Source: Item 22 — CONTRACTS (FDD page 68)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, the document a franchisee must sign to assign their lease is called the "Collateral Assignment and Assumption of Lease." This document is also referred to as simply "this Assignment" within the FDD.
This agreement outlines the conditions under which the franchisee's lease can be assigned to Chem Dry. It specifies that the franchisee grants Chem Dry a security interest in the lease, furniture, fixtures, inventory, equipment, and supplies at the site. This assignment is conditional and serves as security for any obligations the franchisee owes to the lessor or for any breaches of the lease or Franchise Agreement.
Furthermore, the agreement states that in the event of a breach or default by the franchisee, or if Chem Dry makes any payment to the lessor due to the franchisee's breach, Chem Dry has the option to consider it an immediate default under the Franchise Agreement. Chem Dry is not obligated to assume the lease or take possession of the site but can do so at its discretion, providing written notice to the franchisee. The franchisee also appoints Chem Dry as their attorney-in-fact, allowing Chem Dry to manage and operate the site in case of default.