What condition must Craters & Freighters meet for the Landlord to recognize them as the tenant under the Lease?

According to the 2025 Craters & Freighters Franchise Disclosure Document, if Craters & Freighters chooses to take possession of the premises, the Landlord will recognize Craters & Freighters as the tenant under the lease if Craters & Freighters confirms in writing that they will assume the obligations of the franchisee (Lessee) under the lease. Additionally, Craters & Freighters must cure any defaults of the franchisee within the Cure Period, which is 30 days after the Landlord delivers a Default Notice to Craters & Freighters.

This clause is part of an addendum to the lease agreement between the landlord and the franchisee. The addendum also states that the landlord must notify Craters & Freighters in writing of any franchisee defaults under the lease, giving Craters & Freighters the option to cure the default. This arrangement protects Craters & Freighters' interest in maintaining a viable franchise location and brand presence.

For a prospective franchisee, this means that Craters & Freighters has a mechanism to step in and take over the lease if the franchisee defaults, provided they cure the default within the specified timeframe. This can be beneficial for the franchisee as it may prevent a complete shutdown of the business and provide an opportunity for Craters & Freighters to find a new franchisee for the location. However, it also means that the franchisee's lease can be taken over by Craters & Freighters if they fail to meet their lease obligations.

This type of clause is relatively common in franchising, as it allows the franchisor to maintain control over the location and ensure business continuity. It's important for a prospective Craters & Freighters franchisee to understand the terms of the lease and the addendum, and to be aware of the circumstances under which Craters & Freighters might exercise its right to assume the lease.