What happens to Deka Lash's liability under the lease after an assignment to another franchisee?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
of Financial Institutions 201 West Washington Avenue, 3rd Floor
Madison, WI 53703
EXHIBIT F-1 FRANCHISOR ADDENDUM; CONDITIONAL ASSIGNMENT OF LEASE
THIS FRANCHISOR ADDENDUM AND CONDITIONAL ASSIGNMENT OF LEASE ("Agreement") is made a part of that certain Lease to which it is attached and is dated of even date therewith. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Lease.
WHEREAS, as a condition to the grant of rights under the Franchise Agreement to Tenant, Franchisor requires that Tenant and Landlord enter into this Agreement by their attachment to the Lease to which it is attached.
NOW, THEREFORE, for and in consideration of the execution of the Lease by Landlord and Tenant and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows:
- I. Tenant assigns all of its right, title and interest in and to the Lease and the Premises to Franchisor, effective automatically without further action of Tenant upon notice from Franchisor to Landlord. Although it is the intention of the parties that this Agreement may be effective as a present assignment, it is expressly understood and agreed that until an event described below has occurred and Franchisor has exercised its remedies, Landlord shall look to Tenant for full performance of Tenant's obligations under the Lease. In no event shall Franchisor have any liability, duty, or obligation to Landlord under the Lease or otherwise without Franchisor's written consent in its sole discretion.
- II. With the exception of Sections III, IV, VIII, IX below which are effective as of the date this Agreement is fully executed by the parties, the assignment of Lease contemplated hereunder is conditional and shall not be effective until the "Effective Date," as defined in Section 5 of this Agreement. Franchisor shall have no right to assume the Lease unless and until:
- a. Default by Tenant under the terms of the Lease, which default is not cured by Tenant within the time limits provided therein; or
- b. Default by Tenant under the terms of the Franchise Agreement which defau
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
According to the 2024 Deka Lash Franchise Disclosure Document, Deka Lash, as the Franchisor, does not assume any liability, duty, or obligation to the Landlord under the lease unless they provide written consent at their sole discretion. The original franchisee (Tenant) remains responsible for fulfilling all lease obligations until Deka Lash exercises its rights under the assignment.
The assignment of the lease from the franchisee to Deka Lash is conditional and only becomes effective under specific circumstances. These conditions include the franchisee defaulting on the lease terms and failing to correct the default within the specified time, defaulting on the Franchise Agreement terms without rectifying it in time, voluntarily filing for insolvency or bankruptcy, discontinuing Deka Lash operations at the premises, or not renewing the Franchise Agreement.
During the lease term, the landlord is obligated to provide Deka Lash with written notice of any franchisee defaults at the same time the franchisee receives such notice. This allows Deka Lash to monitor the franchisee's compliance with the lease and to prepare for a potential assignment if the franchisee fails to meet their obligations. This arrangement protects the landlord by ensuring continued operation and payment, while also giving Deka Lash control over the location if the franchisee is not successful.