What is the purpose of the Conditional Assignment of Lease agreement for a Floyds 99 franchise?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
ther with interest thereon at the rate of two percent per month, or the highest rate allowed by law. Nothing in this Agreement shall obligate Assignee to cure any such default, unless Assignee elects to assume the Lease pursuant to Section 5 below. For purposes of clarification, the parties agree that Assignee shall have the right to cure Assignor's defaults under the Lease without electing 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 Section 3 above, and that Assignee will assume the Lease; or
- b. The events described in either subsections 2(b), 2(c), 2(d) 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 Agreement, and to the conditional assignment of the Lease to Assignee. Landlord agrees that after the Effective Date, Assignee may (i) enter into a sublease with any FLOYD'S 99 franchisee 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 reasonably acceptable to Landlord.
Source: Item 23 — RECEIPT (FDD pages 58–229)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, the Conditional Assignment of Lease agreement ensures that the landlord consents to the lease's terms and its potential assignment to another party. This agreement allows Floyds 99 to sublease the property to a franchisee without needing further consent from the landlord. It also allows Floyds 99 to assign the lease to another entity, provided the new tenant agrees to the lease obligations and is reasonably acceptable to the landlord.
Upon such assignment, Floyds 99 has no further obligations under the lease, and the landlord agrees to enter into a new Conditional Assignment of Lease Agreement with the new tenant. The original tenant (assignor) also agrees to protect Floyds 99 (assignee) from any losses or liabilities related to the agreement. Furthermore, the assignor and landlord cannot surrender, amend, modify, or terminate the lease without Floyds 99's written consent. The assignor must also exercise any lease renewal options unless Floyds 99 agrees otherwise, and Floyds 99 is granted power of attorney to exercise these options if necessary.
This arrangement benefits Floyds 99 by providing flexibility in managing its franchise locations and ensuring continuity of the lease. It protects Floyds 99's interests in the property and allows for smooth transitions between tenants, such as when a franchise is sold or transferred. The agreement also prevents the landlord and original tenant from making changes to the lease that could negatively impact Floyds 99's rights. The franchisee benefits from the brand's involvement in securing and maintaining favorable lease terms.