Under the Cinnaholic Collateral Assignment of Lease, what rights does the Tenant assign to the Franchisor?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
As a condition to accepting a proposed site to be leased or subleased, Developer must sign, and cause the lessor and/or sublessor of the proposed site, to sign the Collateral Assignment of Lease attached hereto as Exhibit B.
Franchisor shall have the right, but shall not be obligated, to cure any default by Tenant under the Lease within Tenant's cure period under the Lease, or within thirty (30) days after the expiration of Tenant's cure period under the Lease, provided that prior to the expiration of Tenant's cure period under the Lease, Franchisor notifies Landlord in writing that Franchisor intends to cure such default;
It is understood and agreed that so long as Franchisor shall not have exercised its option under the foregoing provisions hereof as to the Leased Premises, Franchisor shall not be liable for rent or any obligation of Tenant under and by virtue of or in connection with the Lease, and Tenant shall remain liable for such rent and obligations;
Tenant and Lessor shall not, by agreement or alone, modify or terminate this lease without written consent of Franchisor;
The parties hereby agree that in the event Lessor files for protection under the Bankruptcy Code, Tenant has the right to assign to Franchisor its right to elect to accede to Lessor's bankruptcy rejection of the Lease; and
In order to secure Tenant's performance of the Lease and the Franchise Agreement, and in order to facilitate the agreements between Franchisor and Tenant set forth hereunder, Franchisor shall have an interest superior to Lessor on all Tenant's Trade Fixtures. For purposes of this Assignment, "Trade Fixtures" shall be defined as all merchandise, signs, fixtures, furniture, furnishings, partitions and equipment installed and owned by Tenant.
Source: Item 23 — RECEIPT (FDD pages 62–269)
What This Means (2025 FDD)
According to the 2025 Cinnaholic Franchise Disclosure Document, as a condition to accepting a proposed site to be leased or subleased, the Developer (tenant) must sign, and cause the lessor and/or sublessor of the proposed site, to sign the Collateral Assignment of Lease attached as Exhibit B.
Under the Collateral Assignment of Lease, Cinnaholic has the right, but not the obligation, to cure any default by the tenant under the lease within the tenant's cure period or within 30 days after the cure period expires. However, Cinnaholic must notify the landlord in writing before the tenant's cure period expires that it intends to cure the default. So long as Cinnaholic has not exercised its option regarding the leased premises, Cinnaholic is not liable for rent or any obligation of the tenant under the lease, and the tenant remains liable for such rent and obligations.
The tenant and lessor cannot modify or terminate the lease without Cinnaholic's written consent. If the lessor files for protection under the Bankruptcy Code, the tenant can assign to Cinnaholic its right to elect to accede to the lessor's bankruptcy rejection of the lease. To secure the tenant's performance of the lease and the Franchise Agreement, Cinnaholic has an interest superior to the lessor on all the tenant's trade fixtures, which are defined as all merchandise, signs, fixtures, furniture, furnishings, partitions, and equipment installed and owned by the tenant.