Under what conditions can Closet Storage Concepts withhold approval of a lease or sublease?
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's 2025 Franchise Disclosure Document, the franchisor must approve the lease or sublease for the premises of the franchised business before it is signed. While Closet Storage Concepts states that it will not unreasonably or untimely withhold approval, it can do so if the general business terms of the lease or sublease do not meet their standards.
This means a prospective Closet Storage Concepts franchisee needs to ensure that the lease terms they negotiate align with the franchisor's requirements. Failure to do so could result in the franchisor withholding approval, potentially delaying or preventing the opening of the franchise. It is crucial for franchisees to understand what constitutes acceptable business terms according to Closet Storage Concepts' standards before finalizing any lease agreement.
Furthermore, the franchisee is required to deliver a copy of the signed lease to Closet Storage Concepts within 15 days after its execution. The franchisor's approval of the lease only indicates that the terms fall within the acceptable criteria established at the time of approval. The franchisee must also collaterally assign the lease or sublease to Closet Storage Concepts as security for the timely performance of all obligations under the Franchise Agreement and obtain the Lessor's consent to the collateral assignment.