Under what conditions does a Deka Lash tenant assign their lease to the franchisor?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
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 default is not cured by Tenant within the time limits provided therein; or
- c. Voluntary institution of any insolvency or bankruptcy proceedings as a debtor or insolvent on the part of Tenant or involuntary insolvency or bankruptcy proceedings brought against Tenant which are not dismissed within 60 days of the filing thereof;
- d. Discontinuation by the Tenant of operation of a Deka Lash operation in the Premises, whether voluntarily or involuntarily; or
- e. Nonrenewal by Tenant of the Franchise Agreement
- III. During the term of the Lease, Landlord agrees to give Franchisor written notice of all defaults of Tenant concurrently with the giving of such notice to Tenant. Landlord
- further agrees to give Franchisor a 10 day period to cure such default, or the period provided to the Tenant in the Lease, whichever period shall be longer.
- IV. Nothing in this Agreement shall obligate Franchisor to cure any such default, unless Franchisor agrees in writing in its sole discretion.
- V. The date upon which the assignment shall be effective (the "Effective Date"), is the date upon which Landlord and Tenant receive written notice from Franchisor that:
- a. Franchisor will cure the default of Tenant in the Lease in which Landlord has given notice to Franchisor pursuant to the provisions of Section 3 above, and that Franchisor will assume the Lease; or
- b. The events described in either subsections 2(b), 2(c), 2(d) or 2(e) above have occurred and that Franchisor will assume the Lease.
- VI. As of the Effective Date, Franchisor will assume all rights, duties, responsibilities and obligations of Tenant arising on or after the Effective Date pursuant to the terms and provisions of the Lease.
- VII. Landlord hereby consents to the terms and provisions of this Agreement, and to the assignment of the Lease to Franchisor. Landlord agrees that after the Effective Date, Franchisor may (i) enter into a sublease with any other franchisee of Franchisor without Landlord's further consent, or (ii) further assign the Lease to a franchisee of Franchisor who shall agree to assume Tenant's obligations under the Lease. Landlord further agrees that upon the occurrence of any such assignment, Franchisor shall have no further liability or obligation under the Lease.
- VIII. Tenant and Landlord agree not to allow any surrender or other assignment of the Lease without the prior written consent of Franchisor.
- IX. All notices or demands required hereunder shall be made in writing and shall be deemed to be fully given two days after deposit in the U.S. certified mail, postage prepaid, return receipt requested or one day after sent Federal Express or similar overnight courier for overnight delivery. Franchisor's address for notices is 20 South Main Street, #248, Bountiful, UT 84010.
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
According to the 2024 Deka Lash Franchise Disclosure Document, a Deka Lash tenant's lease can be assigned to the franchisor, DL Franchising, LLC, under specific conditions. This assignment becomes effective automatically upon notice from Deka Lash to the landlord, without requiring further action from the tenant. However, until certain events occur and Deka Lash exercises its remedies, the landlord will continue to look to the tenant for fulfilling lease obligations. Deka Lash has no liability to the landlord unless they provide written consent.
The assignment of the lease is conditional and only becomes effective upon the "Effective Date," which is triggered by specific events. These events include the tenant's failure to cure a default under the terms of the lease or the Franchise Agreement within the provided time limits. It also includes the voluntary or involuntary institution of insolvency or bankruptcy proceedings against the tenant, if the involuntary proceedings are not dismissed within 60 days. Discontinuation of the Deka Lash operation at the premises by the tenant, whether voluntary or involuntary, and nonrenewal of the Franchise Agreement by the tenant are also conditions that trigger lease assignment.
Upon the Effective Date, Deka Lash assumes all the tenant's rights, duties, responsibilities, and obligations under the lease. The landlord consents to these terms and the assignment of the lease to Deka Lash. After the Effective Date, Deka Lash can sublease the premises to another franchisee without the landlord's consent or further assign the lease to another franchisee who agrees to assume the tenant's obligations. Upon such assignment, Deka Lash has no further liability under the lease. The agreement also stipulates that the tenant and landlord cannot allow any surrender or other assignment of the lease without Deka Lash's prior written consent.