Is the transferee of a Golden Krust Caribbean Restaurant franchise required to assume the existing lease?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
of one of your owners, by will, declaration of or transfer in trust or under the laws of intestate succession; or
- (f) pledge of this Agreement (to someone other than us) or of an ownership interest in you as security, foreclosure upon the Restaurant or your transfer, surrender or loss of possession, control or management of the Restaurant.
C. CONDITIONS FOR APPROVAL OF TRANSFER
Our approval for a transfer shall be conditioned upon the following:
(1) you be then in full compliance with the terms of this and any other agreement between us including but not limited to complying with all current system standards and you or the transferee paying
to us a transfer fee of $10,000.00. In addition, you and the transferee must sign all agreements we require (which may include an assignment agreement or a new franchise agreement (or the remainder of the term of this Agreement)).
- (2) the transferee and its owners meeting our then-current criteria for franchisees, having adequate financial resources, aptitude, experience and otherwise being capable of operating a Golden Krust Restaurant.
- (3) you submitting all proposed advertisements for the sale or other disposition of the franchise to us for written approval, our approval shall not be unreasonably withheld;
- (4) you paying all amounts owed to us and our affiliates and all other creditors of your Golden Krust Restaurant;
- (5) you executing a general release of us, our affiliates and officers, directors and employees; and
- (6) the transferee purchasing all of your assets used in the Golden Krust Restaurant, assuming all of your existing business liabilities including liabilities owed to us and assuming your le
Source: Item 22 — CONTRACTS (FDD page 35)
What This Means (2024 FDD)
According to Golden Krust Caribbean Restaurant's 2024 Franchise Disclosure Document, if a franchisee transfers their franchise to a new owner, the new owner (transferee) is required to assume the existing lease agreement for the restaurant premises. This is one of the conditions that Golden Krust Caribbean Restaurant places on approving the transfer of a franchise.
This requirement ensures that the restaurant can continue operating at its current location without interruption, as the lease agreement remains in effect. For a prospective buyer, this means they will be taking over the responsibilities and obligations of the existing lease, including rent payments, maintenance, and adherence to the lease terms.
It is important for the transferee to carefully review the terms of the existing lease before completing the purchase of the franchise. This review should include understanding the remaining term of the lease, any renewal options, and any restrictions or obligations outlined in the lease agreement. The transferee should also assess whether the lease terms are favorable for their business operations and financial projections.
In addition to assuming the lease, the transferee must also meet Golden Krust Caribbean Restaurant's criteria for franchisees, have adequate financial resources, aptitude, and experience, purchase all of the seller's assets used in the Golden Krust Restaurant, and agree to update, remodel, and refurbish the Restaurant to reflect the then current design and trade dress of Golden Krust Restaurants.