What must Craters & Freighters confirm to the Landlord in writing if it takes possession of the premises?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Landlord consents to the foregoing collateral assignment of the Lease and agrees that, if Franchisor takes possession of the premises demised by the Lease and confirms to Landlord in writing that Franchisor will be assuming the obligations of Lessee under the Lease, Landlord will recognize Franchisor as the tenant under the Lease, provided that Franchisor has cured the default(s) of Lessee within the Cure Period.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 FDD, if Craters & Freighters takes possession of a franchisee's premises, it must confirm in writing to the landlord that it will assume the obligations of the franchisee under the lease. This written confirmation is necessary for the landlord to recognize Craters & Freighters as the new tenant.
This provision is part of an addendum to the lease agreement between the franchisee (Lessee) and the landlord. The addendum outlines the rights and responsibilities of Craters & Freighters (Franchisor) in the event of a franchisee default. Specifically, if the franchisee fails to meet their lease obligations, the landlord must notify Craters & Freighters, giving them the option to cure the default and take over the lease.
For a prospective Craters & Freighters franchisee, this clause offers a degree of security. If a franchisee defaults on their lease, Craters & Freighters has the option to step in, assume the lease, and continue operating the business. This can prevent a complete shutdown of the business and protect the brand's presence in that location. However, it's important to note that Craters & Freighters is not obligated to take over the lease; it is their right, not a requirement. Additionally, Craters & Freighters must cure any existing defaults within a specified Cure Period to be recognized as the tenant.