Is the Assignee obligated to cure any default under the lease for the Fat Shack restaurant?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
, or the highest rate allowed by law. Nothing herein shall obligate Assignee to cure any such default, unless Assignee elects to assume the Lease pursuant to Section 5 below.
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- The date upon which the assignment shall be effective (the "Effective Date"), is the date upon which Landlord and Assignor receive written notice from Assignee that:
- (a) Assignee will cure all prior defaults of Assignor in the Lease in which Landlord has given notice to Assignee pursuant to the provisions of paragraph 3 above, and that Assignee will assume the Lease; or
- (b) The events described in any of subsections 2(b), 2(c), 2(d), 2(e) or 2(f) above have occurred and that Assignee will assume the Lease.
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- As of the Effective Date, Assignee will assume all rights, duties, responsibilities and obligations of Assignor arising on or after the Effective Date pursuant to the terms and provisions of the Lease.
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- Landlord hereby consents to the terms and provisions of this Assignment, and to the assignment of the Lease to Assignee. Landlord further agrees that after the Effective Date, Assignee may (i) enter into a sublease or assignment of the Lease with any FAT SHACK Restaurant franchisee who will operate the FAT SHACK Restaurant located on the Property without Landlord's further consent, or (ii) further assign the Lease to a person, firm or corporation who shall agree to assume the tenant's obligations under the Lease and who is acceptable to Landlord.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to the 2025 Fat Shack Franchise Disclosure Document, the assignee is not obligated to cure any default unless they elect to assume the lease. However, if the assignee chooses to cure a default, the assignor (original leaseholder) is required to promptly reimburse the assignee for the costs incurred, along with interest. The interest rate is set at 1.5 percent per month or the highest rate allowed by law.
If the assignee decides to assume the lease, they must provide written notice to both the landlord and assignor, stating that they will cure all prior defaults of the assignor that the landlord has notified them about. The effective date of the assignment is the date when the landlord and assignor receive this written notice. As of this effective date, the assignee assumes all rights, duties, responsibilities, and obligations of the assignor under the lease.
Furthermore, the landlord agrees to provide the assignee with written notice of any defaults by the assignor at the same time they notify the assignor. The landlord must also grant the assignee a period of 30 days to cure the default, or 10 days after the period provided to the assignor in the lease, whichever is longer. This arrangement allows the assignee time to assess and address any issues before fully committing to the lease.