What rights does the Lease Assignment and Agreement to Lease protect for Creative World School?
Creative_World_School Franchise · 2025 FDDAnswer from 2025 FDD Document
If you lease the Site from a third party, or purchase the Site, we first must approve the lease, financing and/or purchase documents that you will sign. We require that they contain certain provisions that are designed to protect our rights. If you (or your affiliate) lease the Site from a third party, you must sign and deliver to us our standard form of Conditional Assignment and Assumption of Lease (the "Lease Assignment"), which is attached to this disclosure document as Exhibit "E." If you (or your affiliate) purchase or own the Site, you must sign our standard form of Agreement to Lease (the "Agreement to Lease"), which is attached to this disclosure document as Exhibit "F."
The Lease Assignment (which you will sign if you lease the Site) and the Agreement to Lease (which you will sign if you own the Site) generally protect our rights under the Franchise Agreement, including our right to possess the Site and operate the School, at our option, if the Franchise Agreement is terminated prior to expiration. Any person who is related to or affiliated with you or one of your owners, directors, officers or other
principals, and who plans to lease the Site to you or own or obtain financing for the Site, must agree to be bound by these provisions.
Under the Lease Assignment or the Agreement to Lease, we can take possession of the School's Site if you violate the lease or any obligation to us. You still will be responsible for all lease obligations covering the time before we take over. If you and the landlord for the Site are or become related in ownership or control, and we eventually take over the Site, any lease will be amended to be the same length as the Franchise Agreement, to be consistent with commercially reasonable "triple-net" leases being signed in your metropolitan area and to reflect the Site's fair market rental value in your metropolitan area.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 21–25)
What This Means (2025 FDD)
According to Creative World School's 2025 Franchise Disclosure Document, the Lease Assignment and Agreement to Lease are crucial documents that protect the franchisor's interests related to the school's site. If a franchisee leases the site from a third party, they must sign the Conditional Assignment and Assumption of Lease. If the franchisee purchases or owns the site, they must sign the Agreement to Lease.
These agreements primarily ensure that Creative World School can maintain control over the school's location even if the franchise agreement is terminated. Specifically, they grant Creative World School the right to possess the site and operate the school if the Franchise Agreement ends before its natural expiration. This provision is particularly important for maintaining the continuity of the Creative World School brand and operations.
Furthermore, Creative World School can take possession of the school's site if the franchisee violates the lease or any obligation to the franchisor. The franchisee remains responsible for all lease obligations up to the point Creative World School takes over. If the franchisee and the landlord are related, any lease will be amended to match the length of the Franchise Agreement, align with commercially reasonable triple-net leases in the area, and reflect the site's fair market rental value. These stipulations ensure that the terms are fair and consistent with industry standards, preventing potential conflicts of interest or unfair advantages.
These requirements extend to anyone related to the franchisee who leases, owns, or finances the site, ensuring that all parties involved are bound by these provisions. This comprehensive approach safeguards Creative World School's investment and operational control, providing a safety net in case of franchisee default or termination.