Where is the Leased Premises for Cost Cutters Family Hair Salon further depicted?
Cost_Cutters_Family_Hair_Salon Franchise · 2024 FDDAnswer from 2024 FDD Document
22.1 COST CUTTERS' REVIEW OF LEASE. Once a site for the Franchised Location has been accepted by COST CUTTERS, FRANCHISEE shall lease, purchase, or otherwise acquire possession of
the Franchised Location, provided that COST CUTTERS has the right and option to lease or to have an affiliate lease the Franchised Location directly from the landlord and to require the FRANCHISEE to sublease the Franchised Location from COST CUTTERS or one of its affiliates. The lease for the Franchised Location (the "Lease") will be submitted to COST CUTTERS by the FRANCHISEE for COST CUTTERS' review prior to execution of the Lease by the FRANCHISEE. The Lease must, at a minimum, contain (a) the provisions of the Lease Addendum in Exhibit P to the Cost Cutters Franchise Disclosure Document, (b) no radius restrictions, (c) and be conditional upon COST CUTTERS' approval of the FRANCHISEE, (d) give COST CUTTERS the right to enter the premises to conduct inspections at any time during regular business hours, and (e) the right, but not the obligation, to assume the Lease for the remaining term, in accordance with the provisions of this Article, if the FRANCHISEE is evicted by the Landlord or if this Agreement expires or is terminated by either COST CUTTERS or the FRANCHISEE for any reason prior to the expiration of the Lease, and (f) other reasonable terms required by COST CUTTERS including, without limitation the right to exercise options. COST CUTTERS' review of the Lease prior to its execution will not be for the purpose of approving the legal aspects, economics or rental terms of the Lease. Accordingly, COST CUTTERS will have no responsibility to the FRANCHISEE with regard to the economics or legality or enforceability of the Lease. If FRANCHISEE requests and COST CUTTERS agrees to guarantee FRANCHISEE's lease obligations in any way (e.g., as tenant or guarantor), then COST CUTTERS reserves the right to charge FRANCHISEE a monthly fee of the amount by which twelve percent (12%) of FRANCHISEE's monthly gross sales exceeds FRANCHISEE's monthly lease payments for as long as such guaranty is in effect. COST CUTTERS has no obligation to guarantee FRANCHISEE's lease in any way, but if COST CUTTERS does, FRANCHISEE must pay such monthly lease guaranty fee.
Source: Item 23 — RECEIPT (FDD pages 76–439)
What This Means (2024 FDD)
According to Cost Cutters Family Hair Salon's 2024 Franchise Disclosure Document, the lease for the franchised location is further detailed in the Lease Addendum, which is included as Exhibit P within the document. Specifically, Item 22.1 mentions that the lease must contain the provisions outlined in this addendum.
Prior to executing the lease, a Cost Cutters Family Hair Salon franchisee must submit it to Cost Cutters Family Hair Salon for review. The lease needs to include specific stipulations, such as a Lease Addendum (Exhibit P), the absence of radius restrictions, and a condition that the lease is contingent upon Cost Cutters Family Hair Salon's approval of the franchisee. Additionally, Cost Cutters Family Hair Salon needs to have the right to enter the premises for inspections during business hours and the option to assume the lease if the franchisee is evicted or the agreement is terminated before the lease expires.
It's important to note that Cost Cutters Family Hair Salon's review of the lease does not constitute an approval of its legal or economic terms, and Cost Cutters Family Hair Salon assumes no responsibility regarding the lease's economics, legality, or enforceability. However, if Cost Cutters Family Hair Salon agrees to guarantee the franchisee's lease obligations, they reserve the right to charge a monthly fee. This fee would be the amount by which 12% of the franchisee's monthly gross sales exceeds their monthly lease payments, applicable for as long as the guaranty is in effect.