Does the landlord consent to the assignment of the lease to Fly To Fit?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
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- Termination of Franchise Agreement. If the Franchise Agreement between Franchisor and Tenant is terminated during the term of the Lease, then upon the written request of Franchisor, Tenant shall assign the Lease to Franchisor. Landlord hereby consents to the assignment of the Lease to Franchisor.
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- Assignment and Subletting. Notwithstanding any provision of the Lease to the contrary, Tenant shall have the right to assign or sublet the Lease to Franchisor, provided that no such assignment or sublease shall relieve Tenant or any guarantor of liability under the Lease. If Franchisor becomes the lessee of the Leased Premises, then Franchisor shall have the right to assign or sublease its lease to a franchisee of the Fly To Fit brand. Any provision of the Lease which limits Tenant's right to own or operate other Fly To Fit outlets in proximity to the Leased Premises shall not apply to Franchisor.
Source: Item 23 — RECEIPTS (FDD pages 44–134)
What This Means (2024 FDD)
According to Fly To Fit's 2024 Franchise Disclosure Document, the landlord consents to the assignment of the lease to Fly To Fit under specific conditions. If the Franchise Agreement between the franchisee (Tenant) and Fly To Fit is terminated during the term of the lease, the franchisee must assign the lease to Fly To Fit upon Fly To Fit's written request. The landlord's consent to this assignment is pre-approved in the lease agreement.
This arrangement provides Fly To Fit with an option to take over the lease if a franchisee's business fails or the franchise agreement is terminated. This can be beneficial for Fly To Fit as it allows them to maintain a location and potentially re-franchise it to another operator, ensuring continuity of the brand's presence in that market. It also protects the landlord by providing a viable tenant in case the original franchisee defaults.
However, the original franchisee remains liable under the lease even after assignment or subletting to Fly To Fit. If Fly To Fit becomes the lessee, it has the right to assign or sublease the premises to another Fly To Fit franchisee. This clause ensures Fly To Fit's flexibility in managing the location and its ability to transfer the lease to a qualified successor.
This type of clause is relatively common in franchise agreements, particularly for businesses that rely on specific locations. It is important for a prospective Fly To Fit franchisee to understand the implications of this clause, especially regarding their ongoing liability under the lease even after the business is transferred back to Fly To Fit.