If a Chocolate Bash franchisee loses possession of the location, what are the consequences?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
ddress:
Attachment 4 to Franchise Agreement
RIDER TO LEASE AGREEMENT
| Landlord: | Franchisor: Chocolate Bash Franchising, LLC |
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| Notice Address: | Notice Address: 5820 Casson Drive, Yorba Linda CA 92886 Telephone: 714-582-9166 |
| Telephone: | |
| Tenant: | |
| Leased Premises: |
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- Use. Tenant is a franchisee of Franchisor. The Leased Premises shall be used only for the operation of a Chocolate Bash business (or any name authorized by Franchisor).
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- Notice of Default and Opportunity to Cure. Landlord shall provide Franchisor with copies of any written notice of default ("Default") given to Tenant under the Lease, and Landlord grants to Franchisor the option (but not the obligation) to cure any Default under the Lease (should Tenant fail to do so) within 10 days after the expiration of the period in which Tenant may cure the Default.
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- Termination of Lease. Landlord shall copy Franchisor on any notice of termination of the Lease. If Landlord terminates the Lease for Tenant's Default, Franchisor shall have the option to enter into a new Lease with Landlord on the same terms and conditions as the terminated Lease. To exercise this option, Franchisor must notify Landlord within 15 days after Franchisor receives notice of the termination of the Lease.
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- Termination of Franchise Agreement. If the Franchise Agreement between Franchisor and Tenant is terminated during the term of the Lease, then upon the written request of Franchisor, Tenant shall assign the Lease to Franchisor. Landlord hereby consents to the assignment of the Lease to Franchisor.
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- Assignment and Subletting. Notwithstanding any provision of the Lease to the contrary, Tenant shall have the right to assign or sublet the Lease to Franchisor, provided that no such assignment or sublease shall relieve Tenant or any guarantor of liability under the Lease. If Franchisor becomes the lessee of the Lease Premises, then Franchisor shall have the right to assign or sublease its lease to a franchisee of the Chocolate Bash brand. Any provision of the Lease which limits Tenant's right to own or operate other Chocolate Bash outlets in proximity to the Leased Premises shall not apply to Franchisor.
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- Authorization. Tenant authorizes Landlord and Franchisor to communicate directly with each other about Tenant and Tenant's business.
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- Right to Enter. Upon the expiration or termination of the Franchise Agreement or the Lease, or the termination of Tenant's right of possession of the Leased Premises, Franchisor or its designee may, after giving reasonable prior notice to Landlord, enter the Leased Premises to remove signs and other material bearing Franchisor's brand name, trademarks, and commercial symbols, provided that Franchisor will be liable to Landlord for any damage Franchisor or its designee causes by such removal.
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Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, if a franchisee's lease is terminated due to default, Chocolate Bash has the option to enter into a new lease with the landlord under the same terms as the original lease. To exercise this option, Chocolate Bash must notify the landlord within 15 days after receiving notice of the lease termination. Additionally, if the Franchise Agreement is terminated, the franchisee must assign the lease to Chocolate Bash upon written request, a condition to which the landlord consents.
Furthermore, upon the expiration or termination of the Franchise Agreement or the lease, Chocolate Bash or its designee has the right to enter the premises to remove signs and other materials bearing Chocolate Bash's brand name and trademarks, provided they give reasonable notice to the landlord and are liable for any damage caused by the removal. The franchisee is responsible for de-identifying the location within 30 days after termination or expiration, removing all Chocolate Bash signage and trade dress to the satisfaction of Chocolate Bash. If the franchisee fails to do so, Chocolate Bash may enter the location to remove the marks and de-identify the location without being charged with trespass or being liable for any assets removed or damage caused.
These stipulations protect Chocolate Bash's brand and ensure a smooth transition if a franchise location closes. The franchisee bears the responsibility for the costs associated with de-identifying the location, and failure to do so allows Chocolate Bash to take action at the franchisee's expense. The franchisor does not assume any liability with respect to the Lease Premises or any obligation as Tenant under the Lease.