What is the significance of the Conditional Assignment of Lease mentioned in the Floyds 99 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 is an agreement between the assignor (tenant), Floyds 99 Franchising, LLC (assignee), and the landlord. This agreement outlines the conditions under which the lease can be transferred from the tenant to Floyds 99. Floyds 99 requires this agreement as a condition for granting rights under the Franchise Agreement. The franchisee, as the assignor, assigns their rights to the lease to Floyds 99, but the actual transfer is conditional.
The assignment becomes effective, granting Floyds 99 the right to pursue remedies, only upon the occurrence of specific events. These events include the tenant's default under the lease terms, failure to cure defaults within specified time limits, default under the Franchise Agreement, insolvency or bankruptcy proceedings, discontinuation of the Floyds 99 shop operation, or non-renewal of the Franchise Agreement. Until one of these events occurs and Floyds 99 exercises its rights, the landlord will continue to look to the franchisee for fulfilling lease obligations.
Certain sections of the Conditional Assignment of Lease, such as those related to indemnity, restrictions on lease modifications, and the right of Floyds 99 to assign its rights, are effective immediately upon the agreement's execution. This arrangement protects Floyds 99's interests by ensuring they have a mechanism to take over the lease if the franchisee fails to meet their obligations, while also providing immediate protections regarding the lease terms and potential liabilities. The landlord consents to these terms, acknowledging Floyds 99's role and rights in the lease agreement.