Under the Rider to Lease Agreement, can another Cream franchisee expressly assume the obligations of the lease?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
ant intends to operate a Jeni's® Shop (a "Jeni's Ice Creams Scoop Shop") at the Premises, and that Tenant's rights to operate the Jeni's Ice Creams Scoop Shop and to use the Jeni's*®* name, trademarks, and service marks (the "Marks") are solely pursuant to a franchise agreement ("Franchise Agreement") between Tenant and Jeni's Splendid Ice Creams Franchise, LLC ("Franchisor"). Tenant's operations at the Premises are independently owned and operated. Landlord acknowledges that Tenant alone is responsible for all obligations under the Lease unless and until Franchisor or another franchisee expressly, and in writing, assumes such obligations and takes actual possession of the Premises. Landlord agrees not to take an action that would prohibit Tenant from operating the Jeni's Ice Creams Scoop Shop, as contemplated by the Franchise Agreement, at the Premises.
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- Consent to Collateral Assignment to Franchisor.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to the 2025 FDD, the Rider to Lease Agreement outlines the conditions under which another Cream franchisee can assume the lease obligations. Specifically, the Landlord acknowledges that the Tenant (the original Cream franchisee) is responsible for all lease obligations unless the Franchisor (Jeni's Splendid Ice Creams Franchise, LLC) or another franchisee expressly assumes these obligations in writing and takes possession of the premises. This provision protects the landlord while providing a mechanism for Cream to ensure continued operation at the location if the original franchisee exits.
This clause is significant for prospective Cream franchisees as it clarifies the process for transferring lease obligations. If a franchisee wants to sell or transfer their Cream business to another franchisee, the new franchisee can take over the lease, provided it's done expressly in writing and they take possession of the premises. This transferability can be a valuable asset for a franchisee looking to exit the business, as it provides a clear path for another operator to step in and continue operations without disrupting the lease agreement.
Furthermore, the Rider to Lease Agreement also states that the Landlord consents to the assignment of the Lease to another franchisee of Cream with whom the Franchisor has executed its then-standard Franchise agreement. This means that the landlord agrees in advance to allow the lease to be transferred to another Cream franchisee, simplifying the assignment process. This pre-approved consent streamlines the transfer process, making it easier for a franchisee to sell their business to another Cream franchisee, as the landlord's approval is already secured, subject to the new franchisee meeting the standard franchise agreement terms.