What happens if assignment of the lease is prohibited for a City Publications franchise?
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' 2025 Franchise Disclosure Document, if a franchisee's lease agreement prohibits assignment of the lease to City Publications, the franchisee is required to sublease the premises 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 provision ensures that City Publications can maintain control over the business location even if the original franchisee defaults or the franchise agreement is terminated. By requiring a sublease, City Publications avoids potential disruptions to the business and can continue operations without having to negotiate a new lease with the landlord.
For a prospective City Publications franchisee, this means that when negotiating a lease for their business location, they should be aware of this requirement and understand that they may be obligated to sublease the property to City Publications under certain circumstances. It would be prudent to discuss this potential scenario with a real estate attorney to fully understand the implications of such a sublease agreement.