What is the condition that triggers Punch King Fitness's right to assume the Lease Agreement?
Punch_King_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
which Tenant had to cure the default. Notice will be sent to the following address or to the address Franchisor may, from time to time, specify in writing to Landlord:
Punch King Fitness, Inc. 1588 Noriega St., San Franciso, CA 94122
Exhibit 5. Franchise Premises De-identification. Upon termination, expiration, or non-renewal of the Lease Agreement, Tenant may de-identify the Franchise Premises. If the Tenant fails to do so, Landlord gives Franchisor the express right to de-identify. De-identification consists of the removal of all signs; modification or remodeling of all identifying architectural features; repainting as necessary to no longer use the color scheme used by Franchisor, and any other steps necessary (in Franchisor's reasonable discretion) to effectively distinguish the Franchise Premises from Franchisor's proprietary designs and marks. Landlord waives and releases any security or any other interest in or to any furniture, fixtures, equipment, inventory, supplies, or any other items or materials which bear Franchisor's proprietary designs and marks or otherwise designate or are specific to the Punch King Fitness Brand.
Source: Item 22 — CONTRACTS (FDD pages 56–215)
What This Means (2024 FDD)
According to the 2024 Punch King Fitness FDD, Punch King Fitness has the express right to de-identify the Franchise Premises if the Tenant fails to do so upon termination, expiration, or non-renewal of the Lease Agreement. De-identification includes removing all signs, modifying or remodeling identifying architectural features, repainting to eliminate the franchisor's color scheme, and any other steps necessary to distinguish the Franchise Premises from Punch King Fitness's proprietary designs and marks.
This means that if a Punch King Fitness franchise location closes (due to termination, expiration, or non-renewal of the lease) and the franchisee (Tenant) does not remove branding and identifying marks, the landlord gives Punch King Fitness the right to do so. This protects Punch King Fitness's brand identity by ensuring that closed locations do not continue to appear as if they are active or affiliated with the franchise.
Furthermore, the landlord waives any security interest in items bearing Punch King Fitness's proprietary designs and marks. This provision ensures that Punch King Fitness can reclaim or dispose of branded items without legal complications, maintaining control over its brand assets even after a franchise ceases operation. This is a fairly standard clause in franchise agreements to protect the brand's image and prevent confusion after a location closes.