To whom is the tenant liable if Kitchen Solvers exercises its right to assume or assign the lease?
Kitchen_Solvers Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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, if Kitchen Solvers exercises its right to assume or assign a lease, the tenant (franchisee) remains obligated under the lease. Specifically, the franchisee is liable to Kitchen Solvers for all payments made by Kitchen Solvers for rent and other lease obligations. The FDD clarifies that these payments are considered reasonable expenses of foreclosure.
This means that even if Kitchen Solvers takes over the lease, the original franchisee is still responsible for ensuring that all rent and other lease-related payments are made. This creates a potential financial risk for the franchisee, as they could be held liable for costs even after they no longer occupy the premises.
However, the landlord is restricted from terminating the lease or accelerating rent payments as long as Kitchen Solvers, or its franchisee, assumes the franchisee's obligations in writing. This provision does not extend the lease term or provide Kitchen Solvers with additional rights beyond what was initially granted to the franchisee in the original lease agreement. This arrangement protects the landlord's interests while allowing Kitchen Solvers to maintain control over the location in case of franchisee default or termination.