What is the purpose of the Conditional Assignment mentioned in the Floyds 99 Lease Addendum?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
| THIS CONDITIONAL ASSIGNMENT OF LEASE ("Agreement") is made as of this day of |
|---|
| , |
| 20 |
| by |
| and |
| between |
| , |
| a |
| ("Assignor"), FLOYD'S 99 |
| FRANCHISING, LLC, |
| a Colorado limited liability |
| company ("Assignee") and ("Landlord"). |
| A. |
| Assignor |
| is |
| a |
| tenant |
| ("Tenant") |
| of |
| certain |
| property |
| generally |
| known |
| as |
| , |
| located |
| in |
| the |
| City |
| of |
| , |
| State |
| of |
| ("Property"), pursuant to a lease by and between Landlord and Assignor, dated |
| , 20 (the "Lease"). |
| B. |
| Assignor desires to construct, or have constructed by Landlord (whichever is applicable), and |
| thereafter operate a FLOYD'S 99 Shop under a certain franchise agreement between Assignor and Assignee (the |
| "Franchise Agreement"). |
| C. |
| As a condition to the grant of rights under the Franchise Agreement to Assignor, Assignee requires |
| that Assignor enter into this Agreement. |
| NOW, THEREFORE, for and in consideration of the sum of Five 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 FLOYD'S 99 |
| Shop to Assignee. Although it is the intention of the parties that this Agreement is a present assignment, it is expressly |
| understood and agreed that until an event described in Section 2 below has occurred and Assignee has exercised its |
| remedies hereunder, Landlord shall look to Assignor for full performance of Assignor's obligations under the Lease. |
| 2. |
| With the exception of Sections 3, 4, 8, 9, 10, 11, 12 and 13 below which are effective as of the date |
| this Agreement is fully executed by the parties, the assignment of Lease contemplated hereunder is conditional and |
| shall not be effective until the "Effective Date," as defined in Section 5 of this Agreement. 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 under any guaranty of the Lease; |
| 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; |
| c. |
| Voluntary institution of any insolvency or bankruptcy proceedings as a debtor or insolvent |
| on the part of Assignor (or any guarantor of the Lease) or involuntary insolvency or bankruptcy proceedings brought |
| against Assignor (or any guarantor of the Lease) which are not dismissed within 60 days of the filing thereof; |
| d. |
| Discontinuation by the Assignor of operation of a FLOYD'S 99 Shop on the Property, |
| whether voluntarily or involuntarily; |
| e. |
| Nonrenewal by Assignor of the Franchise Agreement; or |
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 is used to assign the rights, title, and interest in the lease from the franchisee (Assignor) to Floyds 99 Franchising, LLC (Assignee). This assignment, however, is conditional and only becomes effective under specific circumstances, such as the franchisee defaulting on the lease or franchise agreement, becoming insolvent, discontinuing operation of the Floyds 99 shop, or not renewing the Franchise Agreement. Until one of these events occurs and Floyds 99 exercises its remedies, the landlord will continue to look to the franchisee for the fulfillment of lease obligations.
The agreement specifies that certain sections (3, 4, 8, 9, 10, 11, 12 and 13) are effective immediately upon execution by all parties. The landlord consents to this conditional assignment and agrees that Floyds 99 can sublease to another franchisee or assign the lease to another acceptable party without further consent. Upon such assignment, Floyds 99 has no further liability under the lease, and the landlord will enter into a new Conditional Assignment of Lease Agreement with the new tenant.
This arrangement protects Floyds 99 by giving them control over the lease in case the franchisee fails to meet their obligations. It also allows for a smooth transition if the franchisee leaves the business, as Floyds 99 can either operate the location themselves or transfer the lease to another franchisee. The franchisee benefits from Floyds 99's support in securing the lease and the potential for Floyds 99 to step in and take over the lease if needed. The landlord benefits from the assurance that the location will continue to operate as a Floyds 99 shop, maintaining the property's value and appeal.