What happens if a Southern Steer franchisee is in default of the lease for the Franchised Location?

sponsible for the acts of its employees, agents and independent contractors, and will take all reasonable actions necessary to ensure that its employees, agents and independent contractors comply with all federal, state and local laws, rules and regulations including, but not limited to, all discrimination laws, sexual harassment laws and laws relating to the disabled. The Franchisor will not have any right, obligation or responsibility to control, supervise or manage the Franchisee's employees, agents or independent contractors, and will no way be involved in the day-to-day operations of the Franchisee's Southern Steer Business.

26. LEASE AS SECURITY; TERMINATION OF LEASE

26.1. Franchisee's Assignment of the Lease. The Franchisee hereby assigns all of its right, title and interest in and to the Lease (which is incorporated herein by reference) to the Franchisor as security for the Franchisee's performance of the terms and conditions of this Agreement. If an Event of Default occurs, then the Franchisor will have the right and option, but not the obligation, to take and assume the Lease for the remaining term of the Lease under the same terms and conditions, including rental, as originally contracted for by the Franchisee. The Franchisee authorizes the Franchisor to file a UCC-1 Financing Statement and agrees to execute such other documents as may be reasonably required by the Franchisor's attorneys to perfect and record the Franchisor's security interest in the Lease. An "Event of Default," for the purposes of this Section, will occur if:

• (a) this Agreement is terminated by either the Franchisor or the Franchisee for any reason whatsoever;
  • (b) the Franchisee wrongfully terminates this Agreement;
• (c) the Franchisee at any time ceases to do business at the Franchised Location as a Southern Steer Business;
• (d) this Agreement expires and the Franchisee is not granted the right to enter into a Successor Franchise Agreement as provided for in Section 2.2;
• (e) the Lease for the Franchised Location is terminated by either the Landlord or the Franchisee for any reason whatever; or
• (f) this Agreement expires and the Franchisee fails to renew the Lease pursuant to any provisions relating to a Successor Term.

This right granted by the Franchisee to the Franchisor to assume the Franchisee's position as the tenant under the Lease will be at the Franchisor's sole election, and the Franchisor will bear no responsibility for any of the Franchisee's past-due obligations under the Lease.

• 26.2. Perfected Assignment; Notice. This assignment will constitute a perfected, absolute and present assignment; provided, however, the Franchisor will have no right under this assignment to enforce the provisions of the Lease until an Event of Default has occurred. After an Event of Default has occurred, the Franchisor will have the right, but not the obligation, to enforce the provisions of this assignment and to take possession of the Franchised Location by giving the Franchisee and the Landlord written notice that it has affirmatively exercised its rights under this assignment. The written notice will state:
  • (a) that the Franchisor is taking and assuming the Lease from the Franchisee;
  • (b) the date on which the Franchisor will take physical possession of the Franchised Location; and
  • (c) that the Franchisor agrees to be bound by the terms and conditions of the Lease being assumed for the remaining term of the Lease.

Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)