What is the timeframe specified in other agreements that a Craters & Freighters franchisee has to cure a default to avoid a cross-default?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
- Landlord agrees to notify Franchisor in writing ("Default Notice") upon the failure of Lessee to cure any default by Lessee under the Lease.
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- Upon the delivery of the Default Notice in accordance with Section 1 above, Landlord agrees that Franchisor will have the right, but will not be obligated, to cure any default(s) by Lessee under the Lease within thirty (30) days after delivery by Landlord of the Default Notice ("Cure Period"). Franchisor will notify Landlord in writing whether it intends to cure the default(s) of Lessee and take an automatic assignment of Lessee's interest in the Lease.
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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 Craters & Freighters Franchise Disclosure Document, the franchisee's landlord must notify Craters & Freighters in writing if the franchisee fails to address any defaults under their lease agreement. Upon receiving this notice, Craters & Freighters has the option, but not the obligation, to resolve the franchisee's lease defaults within 30 days.
During this 30-day period, Craters & Freighters can inform the landlord in writing whether they intend to correct the franchisee's defaults and assume the franchisee's lease. If Craters & Freighters decides to take possession of the premises and confirms in writing that they will fulfill the franchisee's obligations under the lease, the landlord is required to recognize Craters & Freighters as the new tenant, provided that Craters & Freighters has rectified the franchisee's defaults within the 30-day cure period.
This arrangement allows Craters & Freighters to protect its brand and the location of the franchise by stepping in to manage the lease if a franchisee is struggling. However, it's important to note that Craters & Freighters is not obligated to cure the default, and the franchisee's lease may still be terminated if the defaults are not resolved within the specified timeframe.