What is required for a subsequent assignee of the Fly Fitness lease to be acceptable to the Landlord?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
| to that Conditional Assignment of Lease from | (Assignor) to | ||
|---|---|---|---|
| Fly Fitness Franchise, L.L.C. (Assignee) dated The undersigned Landlord under the aforedescribed Lease further hereby: | for the property known as | ||
| (a) | default by Assignor under the Lease; | Agrees to notify Assignee in writing of and upon the failure of Assignor to cure any | |
| (b) | notice thereof in accordance with paragraph (a) above; | Agrees that Assignee shall have the right, but shall not be obligated, to cure any default by Assignor under the Lease within 30 days after delivery by Landlord of | |
| (c) | Assignee period the non-monetary defaults, if any, of Assignor under the Lease; | Consents to the foregoing Conditional Assignment and agrees that if Assignee takes possession of the Premises demised by the Lease and confirms to Landlord the assumption of the Lease by Assignee as tenant thereunder, Landlord shall recognize as tenant under the Lease, provided that Assignee cures within the 30-day | |
| (d) | no further liability or obligation under the Lease as assignee, tenant or otherwise. | Agrees that Assignee may 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 and upon such assignment Assignee shall have |
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, if Fly Fitness (as the initial assignee) further assigns the lease, the new assignee must meet specific criteria to be acceptable to the landlord. The subsequent assignee must agree to assume the tenant's obligations under the lease. Additionally, the subsequent assignee must be reasonably acceptable to the landlord. This clause ensures that any new tenant taking over the lease is both willing to fulfill the lease terms and is someone the landlord approves of, protecting the landlord's interests in the property.
This requirement is fairly standard in franchising, as landlords want assurance that any business operating on their property is financially stable and will maintain the premises appropriately. For a prospective Fly Fitness franchisee, this means that if they ever want to sell or transfer their franchise, the buyer will need to be vetted not only by Fly Fitness but also by the landlord. This could potentially complicate the sale process, as it adds another layer of approval needed before the transaction can be completed.
It is important for potential franchisees to understand that the landlord's approval is not guaranteed and can be based on various factors, such as the assignee's financial background, business experience, and overall suitability as a tenant. Franchisees should maintain a good relationship with their landlord and understand their criteria for tenant approval to facilitate a smoother transfer process if they decide to sell their Fly Fitness franchise in the future.