What is the section number for 'Assignment' in the Lees Famous Recipe Franchise Agreement?
Lees_Famous_Recipe Franchise · 2025 FDDAnswer from 2025 FDD Document
14. ASSIGNMENT
- A.
By Us.
This Agreement is fully assignable by us and benefits our successors and assigns.
Any such assignment will require the assignee to fulfill our obligations under this Agreement.
You acknowledge and agree that, following the effective date of any such assignment, you will look solely to the transferee or assignee, and not to us, for the performance of all obligations under this Agreement.
Separately, we may assign or delegate to an affiliate or other third party certain of our obligations under this Agreement without assigning our interest in this Agreement.
In such instance, we will remain the party ultimately responsible for the performance of such obligation(s).
- B.
Assignment to Wholly Owned Entity.
You (as an individual) may assign this Agreement to a corporation or a limited liability company that conducts no business other than the Restaurant (or other Lee's Famous Recipe Restaurants under franchise agreements with us), provided: (1) the Restaurant is actively managed by you or an operating manager approved by us; (2) you own one hundred percent (100%) of the ownership interest in the corporation or limited liability company; (3) you and all Principal Owners of the assignee entity sign the Guaranty attached hereto as Exhibit D; (4) you provide us thirty (30) days' written notice before the proposed date of assignment of this Agreement to the corporation or limited liability company; and (5) you provide us a certified copy of the articles of incorporation, operation agreement, organizational documents, and a list of all shareholders or members having beneficial ownership, reflecting their respective interest in the assignee entity.
- C.
Your Assignment or Sale of Substantially all of Your Assets.
You understand that we have granted the Franchise under this Agreement in reliance upon the individual or collective character, aptitude, attitude, business ability and financial capacity of you (and, if applicable, your Principal Owners).
You (and your Principal Owners) will not transfer (whether voluntary or involuntary), assign or otherwise dispose of, in one or more transactions, your business, the Restaurant, substantially all or all of the assets of the Restaurant, this Agreement or any equity or voting interest in you unless you obtain our prior written consent.
Source: Item 22 — CONTRACTS (FDD pages 69–70)
What This Means (2025 FDD)
According to the 2025 Lees Famous Recipe Franchise Disclosure Document, the section in the franchise agreement that discusses assignment is Section 14. This section covers assignment both by Lees Famous Recipe itself and by the franchisee.
Specifically, Section 14(A) addresses assignment by Lees Famous Recipe, stating that the agreement is fully assignable by them and benefits their successors and assigns. It also clarifies that any such assignment will require the assignee to fulfill Lees Famous Recipe's obligations under the agreement, and the franchisee will look solely to the transferee or assignee for performance of all obligations.
Section 14(B) outlines the conditions under which a franchisee (as an individual) may assign the agreement to a wholly-owned corporation or limited liability company. Section 14(C) details the requirements and conditions for the franchisee's assignment or sale of substantially all of their assets, emphasizing the need for Lees Famous Recipe's prior written consent due to the reliance on the franchisee's individual character, aptitude, and financial capacity.