Under what condition does the Dog Haus franchisor have an option to assume the lease?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee in selecting an acceptable site for the Franchised Location. Franchisee acknowledges its sole responsibility for finding the Franchised Location.
- 5.2 Lease for Franchised Location. Franchisee shall not create any obligations on Franchisor's behalf or grant the Landlord any rights against Franchisor, or agree to any term, condition or covenant in the Lease which are inconsistent with any provision of this Agreement. Franchisee shall deliver a fully executed copy of the Lease to Franchisor promptly following its execution, in the form and on the terms previously accepted by Franchisor, without further request by Franchisor. The Lease shall provide, unless Franchisor otherwise consents in writing
prior to the execution of the Lease, that: (i) the Lease may not be amended, assigned or sublet without Franchisor's prior written consent; (ii) Franchisor shall have the right (but not the obligation) to succeed to Franchisee's rights under the Lease if Franchisee fails to exercise any option to renew, and or extend the term of the Lease; (iii) upon Franchisee's Default under the Lease, the Landlord shall notify Franchisor in writing at least fifteen (15) days prior to the termination or non-renewal of the Lease; (iv) Franchisor shall have an option to assume the Lease upon the termination or expiration of the Lease for any reason by giving written notice of the election to Franchisee and the Landlord; (v) Franchisee shall have the unrestricted right, without the Landlord's consent, to assign or sublet the Franchised Location to Franchisor, or any franchisee or licensee approved by Franchisor; (vi) Franchisor shall have the right to enter the Franchised Location to remove all of the Dog Haus Marks from the Franchised Location and modify the décor of the Franchised Location so that it no longer resembles, in whole or in part, a Franchised Restaurant if Franchisee fails to do so;
Source: Item 22 — CONTRACTS (FDD page 87)
What This Means (2025 FDD)
According to Dog Haus's 2025 Franchise Disclosure Document, the franchisor has the option to assume the lease under specific conditions outlined in the lease agreement. Specifically, Dog Haus has the option to assume the lease upon the termination or expiration of the lease for any reason. To exercise this option, Dog Haus must provide written notice of the election to both the franchisee and the landlord.
To ensure this right, Dog Haus requires that the lease agreement contain a clause granting them this option, unless Dog Haus provides written consent otherwise before the lease is executed. As an alternative to including these provisions in the Lease, Dog Haus, franchisee and the Landlord may execute Dog Haus's Then-Current form of an Option to Obtain Lease Assignment.
This provision protects Dog Haus by allowing them to maintain control over the location of a franchise even if the franchisee's lease is terminated or expires. This can be particularly important for maintaining brand consistency and ensuring that the location continues to operate as a Dog Haus restaurant. For a prospective franchisee, this means understanding that Dog Haus has a significant interest in the lease agreement and can step in to take over the lease under certain circumstances.