Besides base rent, what other payments is the Churchs Chicken sublessee responsible for, and what are they collectively called?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
Beginning on the Commencement Date, Sublessee shall, in addition to Base Rent (as defined below), pay to Sublessor on or before the due date therefor, all sums whether or not required to be paid by Sublessor under the Master Lease, to the extent related to the Premises, including without limitation Sublessor's share of Common Area Expenses, if any, (as defined in the Master Lease), charges, costs, expenses, and sums, whether such sum is due the Master Landlord, a third party, or to reimburse the Master Landlord for taxes, property taxes, operating expenses, charges for water, sewer taxes, assessments, common area maintenance charges or other charges, costs, expenses, and sums incurred in connection with the Premises (collectively, "Additional Rent"), (Base Rent and Additional Rent (defined below), shall be referred to collectively as "Rent").
In addition, Sublessee shall be responsible for any state sales tax and shall pay directly to the respective governmental authority.
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, in addition to the fixed base rent, a sublessee is responsible for several other payments. These include state sales tax, which the sublessee pays directly to the relevant government authority. Furthermore, the sublessee must cover all sums required by the sublessor under the Master Lease that are related to the premises. These sums encompass the sublessor's share of Common Area Expenses, charges, costs, and expenses. These payments could be due to the Master Landlord, a third party, or to reimburse the Master Landlord for various expenses. These expenses include property taxes, operating expenses, water, sewer taxes, assessments, and common area maintenance charges. All of these additional payments, along with the base rent, are collectively referred to as "Rent".
Churchs Chicken sublessees are also responsible for utility services. The sublessee must obtain these services directly from the utility company and have the billing in their name. If separate meters are not installed and the utilities are jointly metered with other premises, the sublessee is responsible for paying a pro rata share based on their usage. This means that a franchisee's costs can fluctuate based on factors like the size of their unit, the common area expenses, and their utility consumption.
Prospective Churchs Chicken franchisees should carefully review the Master Lease and Sublease Agreement to fully understand all potential financial obligations beyond the base rent. Understanding these "Additional Rent" items is crucial for accurate financial planning and assessing the overall profitability of the franchise. Furthermore, the sublessee may be required to make tax payments in advance with monthly rent payments into an escrow account held by the sublessor.