What is the name of the company to whom the lease is conditionally assigned in the Fat Shack agreement?
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 the 2025 Fat Shack Franchise Disclosure Document, the lease for the restaurant location is conditionally assigned to FAT SHACK INC., a Delaware corporation, referred to as "Assignee" in the agreement. This conditional assignment is part of the franchise agreement terms. As a condition of granting rights under the Franchise Agreement to the franchisee (referred to as "Assignor" in this context), Fat Shack requires the franchisee to enter into this Assignment of Lease.
This assignment means that while the franchisee initially holds the lease, Fat Shack has the right to take over the lease under certain conditions. These conditions include the franchisee defaulting on the lease terms, defaulting on the franchise agreement, facing insolvency or bankruptcy, discontinuing operation of the Fat Shack Restaurant, or failing to renew either the franchise agreement or the lease.
The conditional assignment of the lease protects Fat Shack's interests by ensuring they can maintain control of the restaurant location if the franchisee fails to meet their obligations. This arrangement is relatively common in franchising, as it allows the franchisor to preserve the brand's presence and operational continuity. Prospective franchisees should carefully review the conditions under which the lease can be assigned to fully understand their obligations and the potential risks involved.