Can Chop5 Salad Kitchen assign the Franchise Agreement without notifying the franchisee?
Chop5_Salad_Kitchen Franchise · 2024 FDDAnswer from 2024 FDD Document
Email: brianm@chop5.com
Mail: CHOP5 Franchise LLC
6011 Brownsboro Park Blvd., Suite F
Louisville, Kentucky 40207 Attention: Brian Mills, President
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- Right to Cure. If Tenant defaults under the Lease, Franchisor has the right (but not the duty) to cure such default within 15 days following the expiration of any applicable cure period. In such event, Franchisor may immediately commence occupancy of the Premises as the tenant under the Lease without obtaining Landlord's or Tenant's consent. Franchisor may thereafter assign the Lease to another CHOP5 Salad Kitchen franchisee or to an entity owned and/or controlled by Franchisor. If it does, Franchisor must first obtain Landlord's written approval of the assignee. Landlord, however, must neither unreasonably withhold nor delay its approval thereof. Landlord will acknowledge any such assignment in writing. No assignment permitted under this Section is subject to any assignment or similar fee or will cause any rental acceleration.
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- Right to Assign. At any time, including, without limitation, upon the expiration or termination of the Franchise Agreement, and without Landlord's prior consent, Tenant may assign the Lease to Franchisor. In such event, Franchisor may thereafter assign the Lease to another CHOP5 Salad Kitchen franchisee or to an entity owned and/or controlled by Franchisor. If it does, Franchisor must first obtain Landlord's written approval of the assignee. Landlord, however, must neither unreasonably withhold nor delay its approval thereof. Landlord will acknowledge any such assignment in writing. No assignment permitted under this Section is subject to any assignment or similar fee or will cause any rental acceleration.
Source: Item 23 — RECEIPT (FDD pages 50–178)
What This Means (2024 FDD)
Based on the 2024 Chop5 Salad Kitchen Franchise Disclosure Document, the franchisor's ability to assign the Franchise Agreement without notifying the franchisee is not explicitly addressed in the provided excerpts. However, the document does outline circumstances under which Chop5 Salad Kitchen can assign the lease for the premises.
Specifically, if the franchisee defaults on the lease, Chop5 Salad Kitchen has the right to cure the default and take over the premises. Following this, Chop5 Salad Kitchen may assign the lease to another franchisee or an entity they own or control, but must first obtain the landlord's written approval, which cannot be unreasonably withheld or delayed. Similarly, the franchisee can assign the lease to Chop5 Salad Kitchen at any time, including upon termination of the Franchise Agreement, without the landlord's prior consent. Chop5 Salad Kitchen can then assign the lease to another franchisee or an entity they control, again requiring the landlord's approval.
Because the excerpts do not directly address the franchisor's ability to assign the Franchise Agreement itself, it is important for a prospective franchisee to seek clarification from Chop5 Salad Kitchen regarding the conditions under which the Franchise Agreement can be assigned, and whether the franchisee will be notified in advance of such an assignment. Understanding these conditions is crucial for assessing the stability and potential changes in the franchise relationship.