What obligations does the My Salon Suite franchisor have regarding the lease after accepting the assignment?
My_Salon_Suite Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisor accepts the assignment by giving timely written notice to both Franchisee and Landlord, the parties agree that from and after the date of Franchisor's written notice of acceptance: (i) Franchisor shall have all of the rights of Tenant under the Lease; (ii) Franchisor shall have the right to assign or sublet all of any part of its interest in the Lease or in the Premises to another Franchised Business owner without Landlord's prior consent; and (iii) Franchisor shall be liable to perform only the obligations of Tenant under the Lease arising from and after the date of Franchisor's acceptance of the assignment and shall have no liability for obligations arising before Franchisor's acceptance of the assignment (except for the duty to cure any defaults committed by Tenant which are outstanding on the date of Franchisor's notice of acceptance of assignment). Any options to extend the term of the Lease shall automatically transfer to Franchisor as an assignee of Tenant's rights under the Lease. If Franchisor accepts an assignment of the Lease, the parties shall thereafter cooperate and work together to achieve an orderly transition of Tenant's leasehold interest to Franchisor with minimal disruption to the service of customers of the Franchised Business.
Source: Item 23 — RECEIPTS (FDD pages 95–230)
What This Means (2025 FDD)
According to the 2025 My Salon Suite Franchise Disclosure Document, if My Salon Suite accepts the assignment of a lease, the company assumes specific rights and responsibilities. My Salon Suite has the right to assign or sublet its interest in the lease or premises to another franchisee without the landlord's prior consent. My Salon Suite will be liable to perform the obligations of the tenant under the lease arising from and after the date of My Salon Suite's acceptance of the assignment. However, My Salon Suite is not liable for obligations arising before its acceptance, except for curing any outstanding defaults committed by the original tenant. Any options to extend the term of the lease automatically transfer to My Salon Suite as the assignee.
This arrangement benefits My Salon Suite by providing flexibility in managing locations and potentially transferring them to other franchisees. It limits their liability to obligations arising after the assignment, except for curing existing defaults.
For a prospective franchisee, this clause offers some assurance that in the event of a franchise termination or other circumstances where the franchisee loses the right to occupy the premises, My Salon Suite may step in and assume the lease. This could prevent the franchisee from being held liable for the remaining term of the lease. However, it's important to note that My Salon Suite's decision to accept the assignment is not guaranteed and depends on the specific circumstances.
Both parties are expected to cooperate to ensure a smooth transition of the leasehold interest from the tenant to My Salon Suite, minimizing any disruption to customer service. Additionally, the landlord agrees not to accept the tenant's voluntary surrender of the lease or amend the lease without prior written notice to and consent from My Salon Suite, providing further protection for My Salon Suite's interests.