Under what conditions will the landlord provide Craters & Freighters with a Default Notice?
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.
-
- 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.
-
- 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 landlord will provide Craters & Freighters with a written Default Notice if the franchisee fails to address any default under the lease agreement. This stipulation is part of an addendum to the lease agreement, ensuring that Craters & Freighters, as the franchisor, is informed of any lease defaults by the franchisee.
This notification allows Craters & Freighters the option, but not the obligation, to rectify the franchisee's default within a 30-day cure period after receiving the Default Notice from the landlord. Craters & Freighters must inform the landlord in writing if they intend to correct the default and assume the franchisee's lease interest.
If Craters & Freighters chooses to take possession of the premises and confirms in writing that they will assume the franchisee's obligations under the lease, the landlord agrees to recognize Craters & Freighters as the new tenant, provided the default is cured within the specified cure period. This arrangement protects Craters & Freighters's interests by giving them a chance to maintain the location and continue operations, while also ensuring the landlord's property remains occupied and the lease obligations are met.