What is the City Publications franchisee's obligation regarding the lease agreement if assignment is prohibited?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
Additionally, upon demand by Franchisor, Franchisee shall assign (or, if an assignment is prohibited, sublease for the full remaining term and on the same terms and conditions as Franchisee's lease) its interest in the lease then in effect for the premises of the Franchised Business to Franchisor, and Franchisee shall furnish Franchisor with evidence satisfactory to Franchisor of compliance with this obligation within thirty (30) days after termination or expiration of this Agreement.
Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
According to City Publications's 2025 Franchise Disclosure Document, if a franchisee's lease agreement prohibits assignment, the franchisee is obligated to sublease the property to City Publications for the full remaining term of the lease. The sublease must be on the same terms and conditions as the original lease held by the franchisee.
This obligation arises upon demand by City Publications, typically at the termination or expiration of the franchise agreement. The franchisee must also provide City Publications with satisfactory evidence of compliance with this obligation within 30 days after the termination or expiration of the agreement.
This requirement ensures that City Publications can maintain control over the business location, if any, even after a franchisee leaves the system. It protects City Publications's interests by allowing them to continue operating at a location that may be valuable to the brand. For a prospective franchisee, this means understanding the terms of their lease agreement and being prepared to sublease to City Publications if required, which could impact their exit strategy and potential liabilities at the end of their franchise term.