What does Closet Storage Concepts' approval of the lease indicate?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
The lease or sublease for the premises of your Franchised Business must be approved by us before it is signed. We will not unreasonably or untimely withhold approval but can do so if the general business terms do not meet our standards. You must deliver a copy of the signed lease to us within 15 days after its execution. Our approval of the lease indicates only that we believe that its terms fall within the acceptable criteria we have established as of the time of our approval.
You must collaterally assign the lease or sublease for the franchise to us as security for your timely performance of all obligations under the Franchise Agreement and obtain the Lessors consent to the collateral assignment. A copy of the collateral assignment is attached as Exhibit "6" to the Closet & Storage Concepts Franchise Agreement.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 22–26)
What This Means (2025 FDD)
According to Closet Storage Concepts' 2025 Franchise Disclosure Document, the franchisor's approval of a franchisee's lease signifies that the terms of the lease meet the criteria Closet Storage Concepts has established at the time of approval. However, Closet Storage Concepts does require franchisees to submit the lease or sublease for their business premises for approval before signing. Closet Storage Concepts states that they will not unreasonably or untimely withhold approval but can do so if the general business terms do not meet their standards. Franchisees must also provide a copy of the signed lease to Closet Storage Concepts within 15 days of execution.
It is important to note that this approval does not constitute a guarantee of the lease's suitability or the location's potential for success. The FDD emphasizes that franchisees are primarily responsible for finding an acceptable site. Furthermore, franchisees must collaterally assign the lease or sublease to Closet Storage Concepts as security for fulfilling their obligations under the Franchise Agreement, and they must obtain the lessor's consent for this assignment.
This requirement is typical in franchising, as franchisors want to ensure that franchisees secure locations that meet brand standards and are financially viable. By approving the lease, Closet Storage Concepts aims to protect its brand and the interests of its franchise system. However, the ultimate responsibility for the lease and the success of the location rests with the franchisee.