What is the effective date referenced in the Conditional Assignment related to the Lease for a Petro Stopping Center?
Petro_Stopping_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
ONDITIONAL ASSIGNMENT AND ASSUMPTION OF AND AMENDMENT TO LEASE**
| THIS CONDITIONAL ASSIGNMENT AND ASSUMPTION OF AND |
|---|
| AMENDMENT TO LEASE |
| (this "Assignment") is made, entered into and effective as of the |
| effective date of the Lease (as defined hereinbelow), by, between and among PETRO |
| FRANCHISE SYSTEMS LLC, with its principal business address located at 24601 Center Ridge |
| Road, Westlake, Ohio 44145-5634 (the "Franchisor"), and whose |
| current principal place of business is (the "Franchisee"), |
| and, whose current principal place of business is |
| (the "Lessor"). |
| BACKGROUND INFORMATION |
| The |
| Franchisor |
| entered |
| into |
| that |
| certain |
| Franchise |
| Agreement |
| (the |
| "Franchise |
| Agreement") dated as of, 202 with the Franchisee, pursuant to which |
| the Franchisee plans to own and operate a Petro |
| Center (the "Petro |
| Center") located at |
| (the "Site"). |
| In addition, pursuant to that certain Lease Agreement (the "Lease"), the Franchisee has |
| leased or will lease certain land on which the Petro |
| Center is or will be located from Lessor. The |
| Franchise Agreement requires the Franchisee to deliver this Assignment to the Franchisor as a |
| condition to the grant of a franchise. |
| Pursuant to the Lease and if applicable, Lessor is undertaking development and |
| construction of the Petro Center for the Franchisee (the "Development and Construction |
OPERATIVE TERMS
The Franchisor, Franchisee, and Lessor agree as follows:
- 1. Background Information: The background information is true and correct. This Assignment will be interpreted by reference to, and construed in accordance with, the background information.
- 2. Incorporation of Terms: Terms not otherwise defined in this Assignment have the meanings ascribed to such terms in the Lease.
- 3. Indemnification of Franchisor: The Franchisee agrees to indemnify and hold the Franchisor and its Affiliates, and each of Franchisor's and its Affiliates respective officers, directors, employees, agents, representatives, successors and assigns harmless from and against any and all claims, demands, actions, causes of action, proceedings, losses, damages, injuries, liabilities, awards, judgments, settlements of damages, cost and expenses, including attorneys' fees and litigation expenses (the "Claims") based upon or arising out of Franchisee's breach of any of
Work"). the terms of the Lease, including the failure to pay rent or any other terms and conditions of the Lease.
4. Conditional Assignment and Assumption:
- (a) The Franchisee hereby grants to the Franchisor a security interest in and to the Lease, all of the furniture, fixtures, inventory and supplies located in the Site and the franchise relating to the Petro Center, and all of the Franchisee's rights, title and interest in and to the Lease as collateral for the payment of any obligation, liability or other amount owed by the Franchisee or its Affiliates to the Lessor arising under the Lease and for any default or breach of any of the terms and provisions of the Lease, and for any default or breach of any of the terms and provisions of the Franchise Agreement. This Assignment shall constitute a lien on the interest of the Franchisee in and to the Lease until satisfaction in full of all amounts owed by the Franchisee to the Franchisor. Franchisee agrees to execute any and all Uniform Commercial Code financing statements and all other documents and instruments deemed necessary by Franchisor to perfect or document the interests and assignments granted herein.
- (b) Upon the occurrence of any of the following (each an "Assumption Event"): (i) a breach or default by Franchisee of the terms of any of the Franchise Agreements or the Lease; or (ii) termination or expiration of the Franchise Agreement, Franchisor shall have the right to cause Franchisee to assign its interest to Franchisor as Tenant under the Lease and in connection therewith, Franchisor shall assume all obligations of Tenant under the Lease, as set forth below, and Franchisor shall be accordingly entitled to possession of the Site (a "Lease Assumption"). Franchisor may exercise its right to a Lease Assumption upon written notice to Lessors delivered no later than thirty (30) days following an Assumption Event (an "Assumption Notice"). Following a Lease Assumption, Franchisor will only be liable for those obligations under the Lease which accrue after Franchisor takes possession. Franchisee shall promptly cooperate in vacating the Site and Lessor will recognize Franchisor as its tenant as of the date of the Assumption Notice.
Source: Item 4 — Other Owners: (FDD pages 228–302)
What This Means (2025 FDD)
According to Petro Stopping Center's 2025 Franchise Disclosure Document, the Conditional Assignment and Assumption of and Amendment to Lease is effective as of the date of the Lease. This means that the agreement between Petro Franchise Systems LLC (the Franchisor), the Franchisee, and the Lessor becomes active on the same date as the Lease Agreement itself.
This arrangement gives Petro Stopping Center certain rights, including a right of first refusal regarding the site and the ability to assume the franchisee's rights under the lease. The Conditional Assignment ensures that Petro Stopping Center has some control over the location and can step in to maintain operations if necessary.
In 2025, an Acknowledgment of Conditional Assignment was provided, further solidifying the agreement. This acknowledgment confirms that a New Owner, as the successor landlord, recognizes the Conditional Assignment and Petro Stopping Center's rights, such as the right of first refusal and lease assumption rights. This ensures that even if the property ownership changes, Petro Stopping Center's interests are protected.
For a prospective franchisee, this means that the lease agreement for their Petro Stopping Center location is subject to certain conditions and rights held by the franchisor. It is crucial to understand the terms of both the lease and the Conditional Assignment to be aware of Petro Stopping Center's rights and how they might impact the franchisee's operation of the business.