What is the document called that outlines the conditional assignment of the lease for a Fat Shack franchise?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
| day of, 202 by and between | THIS CONDITIONAL ASSIGNMENT OF LEASE ("Assignment") is made as of this , a |
|---|---|
| ("Assignor"), FAT SHACK INC., a Delaware corporation ("Assignee") and , a ("Landlord"). WHEREAS, Assignor is a tenant of certain property generally known as , located in the City of , State | |
| of Assignor, dated | ("Property"), pursuant to a lease by and between Landlord and , 202 (the "Lease"); WHEREAS, Assignor desires to construct, or have constructed by Landlord (whichever is applicable), and thereafter operate a FAT SHACK Restaurant under a certain franchise agreement between Assignor and Assignee (the "Franchise Agreement"); and WHEREAS, as a condition to the grant of rights under the Franchise Agreement to Assignor, Assignee requires that Assignor enter into this Assignment. NOW, THEREFORE, for and in consideration of the sum of Ten Dollars and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows: |
| 1. | Assignor hereby assigns all of its right, title and interest in and to the Lease and the FAT |
| SHACK Restaurant to Assignee. | |
| 2. | With the exception of Assignee's rights under paragraph 3 below and Assignor's and Landlord's respective obligations, representations and covenants under paragraphs 3, 4, 8, 9 and 10 below, the Conditional Assignment of lease contemplated hereunder is expressly conditioned upon, and shall not be effective and Assignee shall have no right to pursue any remedy hereunder unless and until: |
| (a) | Default by Assignor under the terms of the Lease, which default (i) is not cured by Assignor within the time limits provided therein or (ii) results in a demand for performance by Assignee under any guaranty of the Lease; or |
| (b) | Default by Assignor under the terms of the Franchise Agreement or under any document or instrument securing the Franchise Agreement, which default is not cured by Assignor within the time limits provided therein; or |
| (c) | Voluntary institution of any insolvency or bankruptcy proceedings as a debtor or involuntary insolvency or bankruptcy proceedings brought against Assignor which are not dismissed within 60 days of the filing thereof; or |
| (d) | Discontinuation by the Assignor of operation of the FAT SHACK Restaurant to be located on the Property, whether voluntarily or involuntarily; or |
| (e) | Nonrenewal by Assignor of the Franchise Agreement; or |
| (f) | Nonrenewal by Assignor of the Lease. |
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, the document outlining the conditional assignment of the lease is called the "Conditional Assignment of Lease". This document is made as of a specific date between the Assignor, Fat Shack Inc. (Assignee), and the Landlord.
The document outlines the terms under which the lease can be conditionally assigned to Fat Shack Inc. by the franchisee (Assignor). This assignment is conditional and only becomes effective if certain events occur, such as the franchisee defaulting on the lease or franchise agreement, facing insolvency, discontinuing operations, or failing to renew the franchise agreement or lease.
Specifically, the Conditional Assignment of Lease states that the franchisee assigns all rights to the lease and the Fat Shack Restaurant to Fat Shack Inc. However, this assignment is not effective unless certain conditions are met, such as default by the franchisee under the lease or franchise agreement, insolvency proceedings, discontinuation of restaurant operations, or nonrenewal of the franchise agreement or lease. This ensures that Fat Shack has a mechanism to take over the lease if the franchisee fails to meet their obligations, protecting the brand and continued operation of the location.