Can Kitchen Solvers assign the lease to an affiliate without the landlord's consent?
Kitchen_Solvers Franchise · 2025 FDDAnswer from 2025 FDD Document
of its desire to terminate the Lease (each an "Assignment Event"). Upon the occurrence of an Assignment Event, Franchisor shall have the option to either:
- (i) assume and occupy the Premises upon written notice to Landlord and Tenant, in which event Franchisor shall be deemed to be substituted as the tenant under the Lease in the place and stead of Tenant and shall be deemed to have assumed expressly all of the terms, covenants and obligations of the Lease theretofore applicable to Tenant and shall likewise be entitled to enjoy all of the rights and privileges granted to Tenant under the terms and conditions of the Lease; or
- (ii) assign the Lease to an affiliate or an approved System franchisee, without obtaining Landlord's prior written consent, provided that, in the event of an assignment to a franchisee, such franchisee: (a) has a net worth equal to or greater than the net worth of Tenant at the time of Lease execution; (b) assumes all of Tenant's obligations under the Lease; and (c) completes Franchisor's initial training program to Franchisor's satisfaction.
- 2.2 If Franchisor exercises either of the rights set forth in paragraphs 2.1(i) or 2.1(ii) above, Tenant shall remain obligated under the Lease and Tenant shall be liable to Franchisor for all payments by Franchisor for rent and other Lease obligations. The parties acknowledge that such payments are reasonable expenses of foreclosure.
- 2.3 If Franchisor exercises either of the rights set forth in paragraphs 2.1(i) or 2.1(ii) above, Landlord shall not terminate or accelerate the rent owed under the Lease in connection with any such assignment, so long as Franchisor, or its franchisee, assumes, in writing, the obligations of Tenant under the Lease. Nothing in this Paragraph 2.3 shall serve to extend the term of the Lease or provide Franchisor with occupancy rights, options to renew or other rights not expressly set forth to Tenant in the Lease.
Source: Item 22 — Contracts (FDD page 49)
What This Means (2025 FDD)
According to Kitchen Solvers' 2025 Franchise Disclosure Document, Kitchen Solvers can assign the lease to an affiliate or an approved franchisee without the landlord's prior written consent under specific conditions. This is part of a Collateral Assignment of Lease agreement involving the tenant (franchisee), Kitchen Solvers (Franchisor), and the landlord.
Specifically, Kitchen Solvers has the option to assign the lease to an affiliate or an approved Kitchen Solvers franchisee if an 'Assignment Event' occurs, such as the franchisee indicating they want to terminate the lease. If Kitchen Solvers assigns the lease to a new franchisee, that franchisee must meet certain criteria: they must have a net worth equal to or greater than the original franchisee's net worth at the time the lease was executed, they must assume all of the original franchisee's obligations under the lease, and they must complete Kitchen Solvers' initial training program to Kitchen Solvers' satisfaction.
Even if Kitchen Solvers or its franchisee assumes the lease, the original franchisee remains obligated under the lease and is liable to Kitchen Solvers for all rent and other lease obligations. The landlord is not allowed to terminate or accelerate the rent owed under the lease due to this type of assignment, as long as Kitchen Solvers or its franchisee assumes the obligations in writing. However, this assignment does not extend the term of the lease or provide any additional rights not already in the original lease.
This arrangement provides Kitchen Solvers with flexibility in managing franchise locations and ensures business continuity if a franchisee exits. For a prospective franchisee, it highlights the importance of understanding the lease terms and the conditions under which Kitchen Solvers might exercise its right to assign the lease. The franchisee should also be aware that they remain liable for lease obligations even after such an assignment.