If Pump It Up delegates its obligations, what is the obligation of the third-party designee?
Pump_It_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor will not take possession of the Pump It Up Business until and unless Franchisee defaults, and/or receives notice of default (and/or until there is a termination, cancellation or rescission of Franchisee's rights) under the Lease, any sublease, any other document or instrument, or otherwise. In such event, Franchisor (or its designee) shall have the right (but not the obligation) to take possession of the Pump It Up Business, expel Franchisee from the Pump It Up Business, and, in such event, Franchisee shall have no further right, title or interest in or under the Lease or to the Pump It Up Business, all such rights thereby passing to Franchisor or its designee, in each case without Landlord's further consent. Franchisee agrees to do all acts necessary or appropriate to accomplish such assignment on Franchisor's request.
Source: Item 23 — RECEIPTS (FDD pages 60–225)
What This Means (2025 FDD)
According to the 2025 Pump It Up Franchise Disclosure Document, if Pump It Up defaults and/or receives notice of default, Pump It Up (or its designee) has the right, but not the obligation, to take possession of the Pump It Up Business and expel the franchisee. In such an event, the franchisee forfeits all rights, title, or interest in the lease or the Pump It Up Business, which then pass to Pump It Up or its designee without requiring further consent from the landlord.
This means that if Pump It Up designates a third party to take over a franchise location due to franchisee default, that designee assumes all rights and interests in the business and lease. The designee essentially steps into the shoes of Pump It Up, gaining control over the physical location and business operations.
For a prospective franchisee, this highlights the importance of adhering to the franchise agreement and lease terms to avoid default. It also clarifies that in the event of a default, Pump It Up has significant control over the franchise location and can transfer that control to a third party. The franchisee loses all rights and interests, emphasizing the potential risks associated with non-compliance.