Under what conditions can Southern Steer take over the lease from the franchisee?

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.

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