What is the definition of 'Default' in the context of the lease agreement and Chocolate Bash?

According to the 2024 Chocolate Bash Franchise Disclosure Document, a 'Default' in the context of the lease agreement refers to a written notice of default given to the tenant (franchisee) by the landlord. This triggers certain rights for Chocolate Bash Franchising, LLC, the franchisor. Specifically, the landlord is required to provide Chocolate Bash with copies of any default notices issued to the franchisee.

This provision is significant because it gives Chocolate Bash the option, but not the obligation, to step in and cure the default if the franchisee fails to do so within the period allowed by the lease. Chocolate Bash has 10 days after the franchisee's cure period expires to remedy the default. Furthermore, the landlord must also copy Chocolate Bash on any lease termination notices. If the lease is terminated due to the franchisee's default, Chocolate Bash has the option to enter into a new lease with the landlord under the same terms as the original lease, provided they notify the landlord within 15 days of receiving the termination notice.

These stipulations protect Chocolate Bash's interests by ensuring the continuity of the franchise location, even if a franchisee is struggling. By having the right to cure defaults or take over the lease, Chocolate Bash can maintain its brand presence and operational stability. However, it is important to note that Chocolate Bash is not obligated to take any action, and explicitly does not assume any liability with respect to the lease premises or any obligation as the tenant under the lease by executing the rider. This clause in the lease agreement is a mechanism that allows Chocolate Bash to control and preserve its locations, but it does not force them to do so.