Under the Floyds 99 Conditional Assignment of Lease, who is initially responsible for fulfilling the Tenant's obligations under the Lease?
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. |
Source: Item 23 — RECEIPT (FDD pages 58–229)
What This Means (2025 FDD)
According to Floyds 99's 2025 Franchise Disclosure Document, the Assignor, who is also the Tenant, is initially responsible for fulfilling the obligations under the lease. This is outlined in the Conditional Assignment of Lease agreement, which states that until certain events occur and Floyds 99 Franchising, LLC (the Assignee) exercises its remedies, the Landlord will look to the Assignor for full performance of the lease obligations.
This means that even though the lease is conditionally assigned to Floyds 99 Franchising, LLC, the franchisee (Assignor) remains primarily responsible for meeting all the terms of the lease, such as paying rent and maintaining the property, unless specific default events occur. These events include defaults under the lease or Franchise Agreement, insolvency or bankruptcy proceedings, discontinuation of the Floyds 99 shop operation, or nonrenewal of either the Franchise Agreement or the lease.
Only upon the occurrence of one of these events and Floyds 99 Franchising, LLC's decision to assume the lease will the responsibility for the lease obligations shift from the franchisee to Floyds 99 Franchising, LLC. This conditional assignment provides a safety net for the landlord and ensures that the franchisee remains committed to fulfilling the lease terms unless there are significant issues with the franchisee's operation or financial stability.