What is the purpose of the conditional assignment of the lease to Floyds 99?

According to the 2025 Floyds 99 Franchise Disclosure Document, the lease for the franchised location is conditionally assigned to Floyds 99 as a form of security. This security ensures the franchisee performs all obligations under both the Franchise Agreement and the lease agreement in a timely manner. This conditional assignment is formalized through Floyds 99's standard Conditional Assignment of Lease, which the franchisee is required to enter into.

This arrangement protects Floyds 99 by giving them a mechanism to ensure the franchisee complies with the terms of the franchise agreement and the property lease. Should the franchisee fail to meet their obligations, Floyds 99 has the right to step in and potentially assume control of the lease, mitigating potential damage to the brand and ensuring continued operation of the location.

Furthermore, the franchisee must also secure the landlord's consent to the terms outlined in Floyds 99's standard Lease Addendum. This can be achieved either by incorporating Floyds 99's required terms directly into the lease or by obtaining the landlord's consent to Floyds 99's standard lease form. This requirement ensures that the lease agreement aligns with Floyds 99's operational standards and protects their interests in the franchised location.