What happens if a Ledgers franchisee has an uncured default of another agreement?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
Notice of Default and Opportunity To Cure.
Landlord shall provide Franchisor with copies of any written notice of default ("Default") given to Tenant under the Lease, and Landlord grants to Franchisor the option (but not the obligation) to cure any Default under the Lease (should Tenant fail to do so) within 10 days after the expiration of the period in which Tenant may cure the Default.
Termination of Lease.
Landlord shall copy Franchisor on any notice of termination of the Lease.
If Landlord terminates the Lease for Tenant's Default, Franchisor shall have the option to enter into a new Lease with Landlord on the same terms and conditions as the terminated Lease, subject to Landlord's approval in its reasonable discretion.
To exercise this option, Franchisor must notify Landlord within 10 days after Franchisor receives notice of the termination of the Lease.
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, provided that any such proposed assignment shall be subject to Landlord's approval in its reasonable discretion and must be exercised within 10 days after termination of the Franchise Agreement.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 38–41)
What This Means (2025 FDD)
Based on the 2025 Ledgers Franchise Disclosure Document, the franchise agreement includes provisions related to a franchisee's lease agreement. Specifically, if a Ledgers franchisee (as a tenant) defaults on their lease agreement, the landlord is required to provide Ledgers (the franchisor) with a copy of any written notice of default.
Ledgers then has the option, but not the obligation, to cure the default within 10 days after the expiration of the period in which the franchisee could cure the default. This means Ledgers can step in to resolve the lease issue if the franchisee fails to do so, potentially preventing eviction and business disruption. The landlord must also copy Ledgers on any lease termination notice.
Furthermore, if the landlord terminates the lease due to the franchisee's default, Ledgers has the option to enter into a new lease with the landlord under the same terms and conditions as the original lease, subject to the landlord's approval. To exercise this option, Ledgers must notify the landlord within 10 days after receiving notice of the lease termination. This provides Ledgers with a mechanism to maintain the location for another franchisee or for a company-owned operation. If the Franchise Agreement is terminated, Ledgers has the option to request the franchisee to assign the lease to them, subject to the landlord's approval, which must be exercised within 10 days after termination of the Franchise Agreement.