Does the Southern Steer Lease Addendum allow the Lessee to assign or sublet the lease?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
Lessee will have the right to assign or sublet all of its right, title and interest in the Lease, at any time during the term of the Lease, including any extensions or renewals thereof, without charge and without first obtaining Lessor's consent in accordance with the Collateral Assignment of Lease attached hereto as Attachment G-1: (a) to Franchisor or Franchisor's parent, subsidiary, or affiliate, (b) to a duly authorized franchisee of Franchisor, (c) in connection with a merger, acquisition, reorganization or consolidation, or (d) in connection with the sale of Lessee's corporate stock or assets.
However, no assignment or sublease will be effective until such time as Franchisor or its designated affiliate gives Lessor written notice of its acceptance of the assignment, and nothing contained herein or in any other document will constitute Franchisor or its designated subsidiary or affiliate a party to the Lease, or guarantor thereof, and will not create any liability or obligation of Franchisor or Franchisor's parent, subsidiary or affiliate unless and until the Lease is assigned or sublet to, and accepted in writing by, Franchisor or Franchisor's parent, subsidiary or affiliate.
In the event of any assignment or sublease, Lessee will at all times remain liable under the terms of the Lease.
Franchisor will have the right to reassign or sublease the Lease to another franchisee without the Lessor's consent in accordance with Section 4(a). Lessor understands and agrees that, in connection with Lessee's assignment or subletting of the Lease to a duly authorized franchisee of Franchisor, Franchisor will be permitted to
charge "additional rent" or "percentage rent" or other charges to its franchisee as part of its regular plan of franchising, and Lessor will not be entitled to any consideration or additional rent as a result of any fees paid to Franchisor by franchisee pursuant to the Lease or otherwise.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, the Lessee (franchisee) has the right to assign or sublet their interest in the lease under specific conditions. Southern Steer allows the franchisee to assign or sublet the lease at any time during the lease term, including extensions or renewals, without charge and without needing the Lessor's (landlord's) prior consent. This is made in accordance with the Collateral Assignment of Lease.
The permitted assignees or sublessees include: Southern Steer Franchising International, LLC (the Franchisor) or its parent, subsidiary, or affiliate; a duly authorized Southern Steer franchisee; or in connection with a merger, acquisition, reorganization, consolidation, or the sale of the franchisee's corporate stock or assets. This provision provides flexibility for the franchisee in case of business changes or sale, as it removes the need to seek the landlord's approval, which can often be a time-consuming or uncertain process.
However, it's important to note that no assignment or sublease will be effective until Southern Steer or its designated affiliate provides the Lessor with written notice of acceptance. Additionally, even with an assignment or sublease, the franchisee remains liable under the terms of the lease. Southern Steer also retains the right to reassign or sublease the lease to another franchisee without the Lessor's consent, as per Section 4(a) of the agreement. The Lessor acknowledges that Southern Steer can charge additional rent or percentage rent to its franchisees as part of its franchising plan, without the Lessor being entitled to any additional consideration.