If assignment of leases is prohibited, what alternative arrangement is required for a Crisp & Green franchise?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
Upon Tenant's default and failure to cure a default under either the Lease or the Franchise Agreement, Franchisor has the right (but not the obligation) to unilaterally accept assignment of Tenant's interest in the Lease in accordance with this Addendum.
Termination or Expiration.
Upon the expiration or termination of the Franchise Agreement, Franchisor shall have the right (but not the obligation) to unilaterally accept assignment of Tenant's interest in the Lease in accordance with this Addendum.
Upon the expiration or termination of the Lease, if Franchisor does not accept assignment of Tenant's interest in the Lease, then Landlord agrees to cooperate and allow Franchisor to enter the Premises, without cost and without being liable for trespass and without incurring any liability to Landlord, to remove all signs and all other items identifying the Premises as a CRISP & GREEN restaurant and to make such other modifications as are reasonably necessary to protect the proprietary marks and franchise system of Franchisor, and to distinguish the Premises from CRISP & GREEN restaurants.
In the event Franchisor exercises its option to acquire title or any other interest in the assets of Tenant, Landlord agrees to permit Franchisor to remove all such assets from the Premises.
Source: Item 23 — RECEIPTS (FDD pages 66–252)
What This Means (2024 FDD)
Based on the 2024 Crisp & Green Franchise Disclosure Document, if a lease agreement prohibits assignment, Crisp & Green Franchising LLC has the right to unilaterally accept assignment of the tenant's interest in the lease under certain conditions. Specifically, this can occur if the tenant defaults under either the lease or the Franchise Agreement, or upon the expiration or termination of the Franchise Agreement. This addendum outlines the rights and obligations of the landlord, tenant, and franchisor in such scenarios.
If Crisp & Green exercises its right to acquire the tenant's lease, the landlord must allow Crisp & Green to enter the premises to remove signs and other items identifying it as a Crisp & Green restaurant. This ensures the protection of Crisp & Green's proprietary marks and franchise system. The landlord must also permit Crisp & Green to remove any assets of the tenant from the premises if Crisp & Green acquires title or any other interest in those assets.
Furthermore, in the event of a default or violation by the tenant, the landlord is required to provide written notice to Crisp & Green on the same day the notice is given to the tenant. Crisp & Green then has the right, but not the obligation, to cure the default or violation, with an additional 15 days after the tenant's cure period to do so. This provision protects Crisp & Green's interest in maintaining the franchise location and operational standards, even if the original franchisee fails to meet their obligations.