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If Jersey Mikes assumes a franchisee's lease, what obligations under the lease will Jersey Mikes NOT be responsible for?

Q: If Jersey Mikes assumes a franchisee's lease, what obligations under the lease will Jersey Mikes NOT be responsible for?

- 9. Franchisee and Landlord a cknowledge and agree that Franchisor shall have no liability or obligation whatsoever under the Lease unless and until Franchisor assumes the Lease in writing pursuant to Sections 6, 7, or 8 above. Franchisor will assume all of Franchisee's obligations under the lease from and after the date of assignment, but shall have no obligation to pay any delinquent rent or to cure any other default under the lease that occurred or existed prior to the date of the assignment. Source: Item 22 — CONTRACTS (FDD page 77)

Jersey_Mikes Franchise · 2025 FDD

Answer from 2025 FDD Document

1. Franchisee and Landlord a cknowledge and agree that Franchisor shall have no liability or obligation whatsoever under the Lease unless and until Franchisor assumes the Lease in writing pursuant to Sections 6, 7, or 8 above. Franchisor will assume all of Franchisee's obligations under the lease from and after the date of assignment, but shall have no obligation to pay any delinquent rent or to cure any other default under the lease that occurred or existed prior to the date of the assignment.

Source: Item 22 — CONTRACTS (FDD page 77)

What This Means (2025 FDD)

According to Jersey Mikes's 2025 Franchise Disclosure Document, if Jersey Mikes assumes a franchisee's lease, it will take on all of the franchisee's obligations from the date of assignment forward. However, Jersey Mikes explicitly states that it is not obligated to cover any outstanding debts or rectify any defaults that occurred before the lease was transferred to them. This means that the franchisee remains responsible for any unpaid rent or unresolved issues that existed prior to Jersey Mike's assuming the lease.

For a prospective franchisee, this is a critical point to understand. If the franchisee is struggling and Jersey Mikes steps in to take over the lease, the franchisee will still be liable for any existing financial or contractual problems with the lease. This could include back rent, damage to the property, or failure to comply with lease terms.

This provision protects Jersey Mikes from inheriting проблемatic lease situations. It also underscores the importance for franchisees to maintain their lease obligations in good standing. Failure to do so could result in continued liability even if the franchise is taken over by Jersey Mikes. Franchisees should ensure they have a clear understanding of their lease terms and financial responsibilities to avoid potential issues.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.

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