When is the Crisp & Green franchisor responsible for obligations under the lease?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
If Franchisor, or its affiliate, elects to accept assignment of the Lease under this paragraph or unilaterally accepts assignment of the Lease as provided for in this Addendum, then Landlord and Tenant agree that (i) Tenant will remain liable for the responsibilities and obligations under the Lease, including without limitation,
amounts owed to Landlord, prior to the date of such assignment, and (ii) Franchisor, or its affiliate, will have the right to thereafter assign the Lease or sublease the Premises to a franchisee of Franchisor without the prior consent or approval of Landlord; provided, however, such franchisee shall agree to operate the Premises pursuant to a franchise agreement with Franchisor. Franchisor, or its affiliate, shall only be responsible for obligations under the Lease arising or incurred during such time that Franchisor, or such affiliate, is the tenant under the Lease.
Source: Item 23 — RECEIPTS (FDD pages 66–252)
What This Means (2024 FDD)
According to Crisp & Green's 2024 Franchise Disclosure Document, Crisp & Green Franchising LLC, or its affiliate, assumes responsibility for lease obligations only during the period they are the tenant under the lease. This occurs if Crisp & Green elects to accept assignment of the lease from the franchisee, or unilaterally accepts assignment as provided in the addendum. Prior to such assignment, the franchisee remains liable for all responsibilities and obligations under the lease, including any amounts owed to the landlord.
This arrangement provides a degree of flexibility for Crisp & Green while also protecting the landlord's interests. The landlord is assured that the original tenant (the franchisee) remains primarily liable until Crisp & Green formally assumes the lease. This clause ensures that landlords have recourse for any outstanding debts or breaches of the lease agreement that occur before the assignment to Crisp & Green.
For a prospective Crisp & Green franchisee, this means they remain fully responsible for the lease until Crisp & Green Franchising LLC or its affiliate officially takes over the lease. It is important for franchisees to maintain good standing with their lease obligations to avoid any defaults that could affect their relationship with both the landlord and Crisp & Green. Franchisees should also understand the conditions under which Crisp & Green might accept assignment of the lease, as this could impact their long-term financial obligations and exit strategy.