Module 5 — Lease, Site Host relationship, and the Lease Addendum

Section 1 · Pre-work (75 minutes)

Required reading

• Operations Manual §5.3 (Site Host Responsibilities and the Division of Obligations). 15 minutes.
• Operations Manual §5.4 (Lease, License, and Contracting Standards). 20 minutes.
• Operations Manual §5.5 (Lease Addendum, Collateral Assignment, SBA Addendum). 15 minutes.
• The trainee’s Franchise Agreement Attachment D (Lease Addendum and Collateral Assignment of Lease) — full text, with the trainee’s own counsel if available. 20 minutes.
• The trainee’s Franchise Agreement Attachment E (SBA Addendum), where applicable. 5 minutes.

Pre-session knowledge check

Submitted via Partner Portal at least 24 hours before the session.

1. May the franchisee sign a lease that does not incorporate the Lease Addendum if the Site Host has executed a separate confidentiality acknowledgment instead? Cite the basis.
2. The Site Host’s attorney proposes a 10-year lease with no renewal options. The franchisee’s FA initial term is 10 years with two 5-year successor terms. Is this lease compliant? Cite the basis.
3. The Site Host requests free charging for their employees during business hours. May the franchisee agree? Cite the basis.
4. A Site Host objects to a specific provision of the Lease Addendum and offers a workaround in a side letter. May the franchisee agree to the side letter? Cite the basis.
5. Within how many Business Days must the franchisee upload an executed lease and Lease Addendum to the Partner Portal?

Bring to session

• The trainee’s executed Franchise Agreement (especially Attachment D, and Attachment E where applicable)
• Any current draft lease, term sheet, or LOI under negotiation
• The trainee’s own counsel if the trainee is currently in active lease negotiation
• The trainee’s Designated Business Manager

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Section 2 · Learning objectives

By the end of this module, the trainee can:

1. Distinguish the obligations of the Site Host, the franchisee, and HiON (under the MSA) across the 9 categories of §5.3 — and ensure the lease reflects each one.
2. Reject the five prohibited commitments from §5.3 [MANDATORY] — uptime/availability guarantees, financial performance or revenue guarantees, exclusivity or radius rights, unapproved charging-price discounts for the Site Host’s employees or customers, and any assumption of HiON’s MSA obligations.
3. Negotiate every lease against the eight required lease/license provisions of §5.4.1 — Lease Addendum incorporation, term sufficient for FA initial term + one successor, 24/7/365 access, install/operate/maintain/remove rights, signage rights, insurance/indemnification/incident handling, snow/ice/debris allocation, assignment/subletting for Collateral Assignment operation.
4. Select the right commercial structure (Fixed rent / Revenue share / Hybrid / Easement-license) and file an [APPROVAL REQUIRED] request for any non-standard structure — including Site Host capital contributions, revenue guarantees to the Site Host, utilization-tied step-ups, or joint ventures.
5. Execute the five-step lease approval workflow of §5.4.3 — term sheet/LOI submitted before signing; HiON 10-Business-Day review; final lease submitted before execution; executed copy uploaded to Partner Portal within 5 Business Days post-signing; no post-execution material modification without HiON written approval.
6. Apply the [MANDATORY] discipline of §5.5 — Lease Addendum is non-negotiable; Collateral Assignment of Lease executed simultaneously; SBA Addendum where lender financing applies; no side letters or undisclosed agreements that conflict with, supersede, or undermine the Lease Addendum.
7. Manage Site Host objections to the Lease Addendum through the §5.5 four-step escalation — do not concede on behalf of HiON; escalate to FBC and Site Acquisition Support; HiON works with Site Host counsel directly; if the Site Host will not accept the Lease Addendum, disqualify.
8. Brief the Site Host on the operational rhythm using the Partner Portal Site Host briefing template — service-provider visit cadence, incident contacts, escalation paths, the operational reality of 24/7/365.

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Section 3 · Why this matters

The lease is the legal foundation of the HiON EV Facility. A correctly-structured lease — with the Lease Addendum incorporated, the Collateral Assignment of Lease executed, and the eight §5.4.1 required provisions present — supports a 10-year operating horizon, a successor renewal, and HiON’s ability to step in on a default to preserve the site for a successor franchisee. A poorly-structured lease — without the Lease Addendum, with a sub-FA-term, with hidden side letters, or with an exclusivity clause the Site Host slipped in — creates a defective foundation that compounds for the entire franchise term.

The Manual is unambiguous about why: the Lease Addendum and Collateral Assignment of Lease are the contractual interface between HiON’s rights as Franchisor and the lease rights the franchisee holds with the Site Host. They allow HiON to step into the lease on a default, transfer, or similar event, to operate the HiON EV Facility or assign it to a successor (§5.5 Purpose). Without that interface, the lease becomes a private contract between two parties — the franchisee and the Site Host — disconnected from HiON’s system standards and disconnected from HiON’s ability to protect the brand and the franchise system on a default event. The Manual’s framing: “The Lease Addendum is non-negotiable. You may not sign any lease or site license that does not incorporate the Lease Addendum” (§5.4.1 [MANDATORY]).

The Site Host relationship is the operating relationship that the franchisee will manage for 10+ years. The Manual lays out the division of obligations in a 9-row table that should be read as the franchisee’s operating contract with the Site Host (§5.3) — what the Site Host does (land, 24/7/365 access, ordinary parking-lot maintenance, parking enforcement, utility easement access, incident cooperation, signage grants); what the franchisee does (installs and operates the Facility, escalates equipment/network/payments to HiON, runs site-area maintenance, leads incident response); and what HiON does under the MSA (equipment, commissioning, network, maintenance, payments, driver support). The lease must reflect each row. A lease that allocates snow removal to the franchisee where the Manual’s framework assigns it to the Site Host creates an operational mismatch the franchisee absorbs every winter for 10 years.

The five prohibited commitments in §5.3 [MANDATORY] are the standards the franchisee will be most pressured to violate during negotiation. Site Hosts who run sophisticated retail or hospitality businesses are accustomed to negotiating concessions — uptime guarantees from utility providers, exclusivity from anchor tenants, revenue guarantees from licensees, employee benefits from on-site service providers. The franchisee is not authorized to offer or accept any of these. Misrepresenting HiON’s role in MSA obligations is also a material breach. The franchisee’s posture in negotiation: a commercial term that requires offering one of the prohibited commitments is a term that disqualifies the deal.

The side-letter prohibition (§5.5 [MANDATORY]) is the most frequent integrity test in lease negotiation. Site Hosts will sometimes propose a private understanding “off the books” — a verbal commitment, a separate signed letter, an email exchange that “supplements” the lease. Any such undisclosed agreement is a material breach. The franchisee’s discipline: every commitment lives in the lease, and the lease incorporates the Lease Addendum, and HiON has reviewed both. There is no second layer.

Acknowledged Elephant: the Site Host’s attorney often genuinely believes the Lease Addendum and the Collateral Assignment are unreasonable. The Site Host’s attorney is rarely wrong on the literal text — these documents are franchisor-protective, as franchise instruments are designed to be. They are also routine; the Manual notes that Site Host objections “are routine and typically negotiable with our involvement” (§5.5 If the Site Host Objects). The franchisee’s job is not to defend the Addendum’s clauses one-by-one against opposing counsel. The franchisee’s job is to escalate, hand the conversation to HiON and Site Acquisition Support, and let the institutional counterparties work through the language. The franchisee who tries to defend the Lease Addendum from scratch in negotiation will either concede something that should not be conceded or lose the deal. The franchisee who escalates the objection within 24 hours preserves both the deal and the standard.

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Section 4 · Core content

4.1 — Site Host responsibilities and the division of obligations (§5.3)

The Manual’s 9-row table (§5.3) — the operating allocation across the three parties. Every row must be reflected in the lease and the Lease Addendum.

Category	Site Host does	Franchisee does	HiON (under MSA) does
Provide land and parking	Grants lease or license for the charging-bay area; provides agreed parking	Leases or licenses per §5.4; installs and operates the HiON EV Facility	N/A — HiON does not contract with the Site Host
24/7/365 access	Ensures driver and service-provider access at all hours (no unannounced gate closures, no restricted-access periods)	Coordinates after-hours access procedures as needed; escalates access failures per §3.2	Arrives to perform services at expected times; invoices False Call-Out liquidated damages under the MSA when access fails
Snow, ice, debris	Per lease, typically the Site Host handles ordinary parking-lot snow and debris (confirm in every lease)	Ensures the charging bay, accessible routes, and connector areas are kept clear (§9)	N/A (hardware thermal/cleaning per the MSA)
Parking enforcement	Per lease, Site Host enforces general parking rules including ICE-in-EV-stall enforcement where Site Host controls parking	Signs and coordinates enforcement; logs recurring ICE-ing for HiON review (§10.4)	N/A
Utility service at the property line	Grants utility easement access as needed for the service extension	Pays for the utility service, transformer, metering, interconnection (§7)	Designs equipment-side electrical for the cabinet and posts
Incident cooperation	Cooperates with law enforcement, emergency services, insurance investigators	Leads incident response, reports per §13	Participates in equipment-side investigation as needed under the MSA
Signage	Grants signage rights consistent with the Lease Addendum	Installs and maintains HiON signage (§2.4)	Provides Brand Asset Library and approved specifications
Equipment and network	None	None beyond escalation	Supplies, installs, commissions, operates, maintains per the MSA
Driver payments and support	None	Escalates per §3.2 and §10	Payment processing through the Tesla mobile application; driver support under the MSA

Two columns deserve particular attention during negotiation:

• Snow, ice, debris is the row most frequently mis-allocated. The Manual’s typical assignment to the Site Host depends on the lease; the franchisee must confirm the allocation in every lease and ensure the lease language matches the operational expectation. A lease that is silent on snow defaults to whoever the local jurisdiction holds responsible — usually the property owner — but a Site Host who has not committed in writing may treat snow as the franchisee’s problem in practice.
• Parking enforcement depends on whether the Site Host controls parking on the property. At a property where parking is managed by a third party (a parking operator, a HOA, a mall management company), enforcement may need to be re-allocated to the operator. The lease must address this; the franchisee’s signage and coordination role (§10.4) does not include direct enforcement of parking rules against drivers.

4.2 — The five prohibited commitments — what cannot be agreed (§5.3 [MANDATORY])

§5.3 [MANDATORY] — verbatim:

“You must not accept from a Site Host, or offer to a Site Host, any commitment involving: (a) charger uptime or availability guarantees; (b) financial performance or revenue guarantees; (c) exclusivity or radius rights; (d) charging-price discounts for the Site Host’s employees or customers that have not been approved by us; or (e) any assumption of HiON’s obligations under the MSA.”

Each prohibition exists for a reason, and the franchisee should be able to articulate why each of the five is non-negotiable:

1. Uptime or availability guarantees — the Uptime Guarantee is HiON’s obligation under the MSA, not the franchisee’s. The franchisee may not extend, replicate, or guarantee uptime to the Site Host. A Site Host who has been promised 99.9% uptime by the franchisee has a private contractual right against the franchisee that is disconnected from HiON’s MSA performance — the franchisee cannot fulfill the promise (only HiON can) and the franchisee carries the contractual exposure.
2. Financial performance or revenue guarantees — the §6.2.3 [MANDATORY] FPR discipline applies in lease negotiation as well as in feasibility (M04). Promising a Site Host a minimum annual revenue, a minimum session count, a minimum driver-volume threshold violates the FTC Franchise Rule and is a material breach. The Manual is explicit at §6.2.3 — FPRs are only the disclosures in Item 19 of the FDD or the actual records of a specific existing HiON EV Facility the franchisee owns or is evaluating to purchase. Anything else is a violation.
3. Exclusivity or radius rights — the §4.1.2 no-protection rule applies. The franchisee may not commit HiON to anything beyond what is expressly permitted by HiON in the Lease Addendum or a separately approved writing. A Site Host who has been promised “no other HiON within 10 miles” has been promised a right that cannot be granted.
4. Unapproved charging-price discounts for the Site Host’s employees or customers — pricing is set through the HiON System and the Tesla network integration (§2.1.3 [MANDATORY] + §10.2). The franchisee does not control the driver price. A discount commitment requires HiON written approval; “we’ll give your employees free charging” is not within the franchisee’s authority.
5. Any assumption of HiON’s MSA obligations — HiON’s obligations to the franchisee (and through the franchisee, to drivers and Site Hosts) are defined by the MSA. The franchisee may not assume or extend those obligations to the Site Host. The Site Host’s only contractual counterparty for charging service is the franchisee; the Site Host has no direct claim against HiON, and the franchisee may not create one by contract.

The discipline: if a Site Host’s term sheet or draft lease contains any of the five, the franchisee declines, cites §5.3 [MANDATORY], and escalates to FBC + Site Acquisition Support.

4.3 — Required lease/license provisions (§5.4.1)

Eight [MANDATORY] required provisions in every lease or site license:

1. Incorporates the Lease Addendum and Collateral Assignment of Lease in the form attached to the FA (Attachment D). The Lease Addendum is non-negotiable. No lease may be signed without it.
2. Term sufficient to support the full FA initial term plus at least one successor term. Shorter terms are not consistent with capital investment and equipment depreciation cycles; shorter terms require exception approval.
3. Grants 24/7/365 access for drivers and for HiON’s authorized service providers (consistent with §2.1.4).
4. Grants the franchisee the right to install, operate, maintain, and eventually remove the HiON EV Facility and all associated EV Charging Equipment, utility service, signage, striping, and site improvements.
5. Grants the franchisee the right to install §2.4 signage at the Facility and at the property entrance, subject to local permitting, without restricting HiON brand presentation below §2.4 standards.
6. Addresses insurance, indemnification, and notification of incidents consistent with §13 and the Lease Addendum.
7. Allocates responsibility for snow, ice, debris, and general parking-lot maintenance in a way consistent with §9.
8. Permits assignment and subletting to the extent necessary for the Collateral Assignment of Lease to operate.

The franchisee should treat the eight provisions as a checklist. A draft lease that misses any of the eight requires correction before submission to HiON. A lease that requires HiON exception approval on any of the eight goes through the §1.2.6 exception process — not through bilateral negotiation with the Site Host.

The term provision (item 2) is the most frequently under-negotiated. A 10-year initial FA term with two 5-year successor terms requires a lease term of at least 20 years (initial + one successor), and the Manual’s recommendation aligns with the equipment depreciation cycle. A Site Host who wants to offer a 5-year initial lease with mutual renewal options is offering a structure that fails item 2 — the renewal options must be the franchisee’s option, not mutual, to provide the successor-term continuity.

4.4 — Commercial structure (§5.4.2)

The commercial structure is a business decision between the franchisee and the Site Host, subject to the required standards and HiON’s review. Four common patterns:

Pattern	Summary	Considerations
Fixed rent	Flat monthly or annual rent for the charging-bay parking spaces and improvements area	Predictable cost; simplest for both sides. Requires careful parking-count negotiation.
Revenue share	A percentage of gross or net revenue from the Facility paid to the Site Host	Aligns interests. Site Host motivated to promote the Facility to their customers. Reporting transparency must be negotiated in the lease. Review with the franchisee’s accountant before agreeing.
Hybrid	A base rent plus a revenue-share component above a threshold	Balances predictability and alignment. Often preferred by sophisticated Site Hosts.
Easement / license (ground rights)	Non-lease right to install and operate, typically for longer terms and at lower recurring cost	Useful where a lease structure does not fit (public-sector, easement-friendly jurisdictions). Still requires the Lease Addendum equivalents.

[APPROVAL REQUIRED] — Any proposed commercial structure not listed above, including any structure that involves:

• Capital contributions from the Site Host
• Revenue guarantees to the Site Host
• Step-up rent formulas keyed to utilization
• Joint ventures

requires HiON prior written approval before the franchisee agrees to it.

Two practical considerations:

• Revenue share reporting. A revenue-share structure obligates the franchisee to report revenue to the Site Host. The lease must specify what is reported (Gross Sales? Net?), at what cadence, with what verification rights. Without lease-level specificity, the franchisee is exposed to disputes about how revenue is calculated. The §12 Gross Sales reporting discipline must align with what the lease promises the Site Host — verify with the franchisee’s accountant before signing.
• Easement / license structures are useful for public-sector Site Hosts and for jurisdictions where ground leases are the norm. The Lease Addendum still applies — the Manual states “still requires the Lease Addendum equivalents.” The legal form is different; the substantive protections are the same.

4.5 — Lease/license approval workflow (§5.4.3)

Five-step workflow with HiON 10-Business-Day response time at the term-sheet stage:

1. Submit the term sheet or LOI through the Partner Portal Site Acquisition Support channel — including parties, site address, parking-bay dimensions and location sketch, commercial structure, term and options, signage rights, access rights, any Site Host-side conditions.
2. HiON responds within 10 Business Days with authorization, conditional authorization, or a request for clarification. Term-sheet authorization is preliminary and subject to final-lease review.
3. Submit the final form of lease or site license, with the Lease Addendum incorporated, for final written authorization before execution. A franchisee who signs a lease before HiON’s final authorization has signed an unauthorized lease.
4. Execute the lease and Lease Addendum simultaneously. The Lease Addendum is incorporated into and executed with the lease — not as a separate post-signing instrument.
5. Upload the fully executed lease and executed Lease Addendum to the Partner Portal within 5 Business Days of execution.

[MANDATORY] post-execution discipline: the franchisee may not amend, terminate, or materially modify a fully executed lease or site license without HiON prior written approval. The Site Host who proposes a “small amendment” six months after signing is proposing a §5.4.3 [MANDATORY] event — escalate.

4.6 — The Lease Addendum, Collateral Assignment of Lease, and SBA Addendum (§5.5)

Five [MANDATORY] standards in §5.5:

1. The Lease Addendum (FA Attachment D) must be fully executed by the Site Host, the franchisee, and HiON (where HiON’s signature is required) simultaneously with, and incorporated into, every lease or site license. The Lease Addendum is not optional.
2. The Collateral Assignment of Lease must be fully executed and delivered in the form attached to the FA as part of Attachment D. Where the FA, a lender, or HiON requires further perfection steps (recordation, estoppel certificates), the franchisee completes them at their cost within the time periods HiON specifies.
3. The SBA Addendum (FA Attachment E) — if the franchisee is financing the franchise with an SBA loan or with financing that requires additional lease-level covenants, the franchisee executes the SBA Addendum (or equivalent) and notifies HiON of the lender’s identity and any lease-side obligations created by the financing.
4. No side letter, collateral agreement, or informal understanding with the Site Host that conflicts with, supersedes, or undermines the Lease Addendum or the Collateral Assignment of Lease. Any such undisclosed agreement is a material breach.
5. Immediate notification to HiON of any default notice, termination notice, or attempted modification from the Site Host. No cure of a default in a way inconsistent with the Collateral Assignment of Lease without consulting HiON.

Why the Collateral Assignment exists: HiON’s right to step into the lease on a default, transfer, or similar event is what allows HiON to preserve a HiON EV Facility for a successor franchisee. Without the Collateral Assignment, on a franchisee default, the lease either terminates (the Facility closes) or rolls back to a private agreement between the original Site Host and a third party HiON has no claim against. The Collateral Assignment is the bridge.

Why the SBA Addendum exists: SBA-backed financing imposes covenant requirements at the lease level — typically subordination of the lender’s interest to the lease and notice protections in event of default. The SBA Addendum harmonizes those requirements with the Lease Addendum and the Collateral Assignment. The franchisee who closes SBA financing without the Addendum has a financing instrument that does not match the lease — and a Site Host whose interests are not aligned with the lender’s.

Audit posture (§5.5 Metrics):

• Every executed lease on file incorporates the current-version Lease Addendum and Collateral Assignment of Lease
• Every Site Host signature on a Lease Addendum matches the Site Host signature on the underlying lease
• Any lender-required addendum (SBA or equivalent) executed and on file where applicable
• No undisclosed side letters or collateral understandings with a Site Host found on audit

4.7 — Side-letter prohibition and disclosure discipline (§5.5)

The side-letter prohibition deserves its own treatment because it is the integrity test the franchisee will be presented most often, in the most casual register, with the least visible consequence.

The forms a side letter takes — illustrative:

• A separate signed letter, “supplemental” to the lease, granting the Site Host a courtesy that the lease does not address
• An email exchange confirming a “spirit of the deal” that is not in the lease text
• A verbal handshake commitment made in a closing meeting between the franchisee and the Site Host’s general manager
• A reciprocal favor traded off the lease — “we’ll waive the first month’s rent if you give our staff free Tesla app credit”
• An MOU, term sheet, or “Statement of Intent” signed by one party and acknowledged by the other after the lease is executed
• A handwritten margin note initialed by both sides on a draft document, never incorporated into the final lease

The discipline: every commitment lives in the lease, and the lease incorporates the Lease Addendum, and HiON has reviewed both. There is no second layer. The Manual’s standard is categorical (§5.5 [MANDATORY]): any such undisclosed agreement is a material breach.

What the franchisee does when a Site Host proposes a side letter: decline. Explain that all commitments must be in the lease, and that the lease is reviewed by HiON before signing. If the Site Host’s proposal is substantively reasonable, offer to incorporate it into the lease and submit the revised lease for HiON authorization. If the substance violates the prohibited-commitments standard (§5.3 [MANDATORY]), decline and escalate to FBC.

The audit-time vulnerability: the side letter that no one remembers signing two years ago surfaces in a transfer audit, a renewal audit, or a litigation discovery. The franchisee who relied on the Site Host’s discretion to keep the side letter quiet discovers that discretion does not survive the Site Host’s CFO leaving, the property being sold, or a default event.

4.8 — When the Site Host objects to the Lease Addendum (§5.5 If the Site Host Objects)

The Manual’s framing of objections (§5.5):

“Occasionally a Site Host objects to specific provisions of the Lease Addendum (most commonly the Collateral Assignment). These objections are routine and typically negotiable with our involvement.”

Four-step franchisee discipline when objections arise:

1. Do not concede on behalf of HiON. The franchisee is not authorized to waive or vary Lease Addendum terms. The franchisee’s first response to any specific objection from Site Host counsel: “I’m not authorized to negotiate the Lease Addendum’s terms. Let me route your specific concern to HiON’s Site Acquisition Support — they work with Site Host counsel directly on these.”
2. Escalate to the FBC and to Site Acquisition Support. Provide the Site Host’s specific concern in writing. The Partner Portal ticket carries the Site Host’s redline or counsel email verbatim — do not paraphrase.
3. HiON works with the Site Host’s counsel. HiON may issue non-substantive clarifications or confirmations to resolve routine objections. Substantive variations require either (a) the Site Host accepting the standard or (b) HiON-issued written approval of a specific variation.
4. If the Site Host will not accept the Lease Addendum, the site is not viable. Disqualify the lead. Document the disqualification in the pipeline tracker with the cited reason (“Site Host counsel will not accept Lease Addendum”). The franchisee preserves the audit record.

The discipline reads as rigid; in practice, the Manual’s framing of these objections as “routine and typically negotiable with our involvement” is generally accurate. The most common Site Host objections — to the Collateral Assignment, to notice provisions, to non-disturbance requirements — are resolved through HiON’s counterpart counsel without breaking the deal. The franchisee’s job is to escalate quickly and not get drawn into defending the Addendum’s text personally.

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Section 5 · Decision drills

Drill 5.1 — The Site Host’s attorney redlines the Lease Addendum

The franchisee’s prospective Site Host’s outside counsel sends back the franchisee’s draft lease with the Lease Addendum’s Collateral Assignment of Lease redlined heavily — three clauses crossed out, one rewritten substantively. The redlined version is otherwise identical. The Site Host’s general counsel writes: “We need these specific changes to the Addendum or our principals will not sign. Let me know if you have authority to accept these as marked.”

State the franchisee’s response language (verbatim) and the cited basis. State the next two actions.

Drill 5.2 — The 10-year lease with no renewal options

A strong Site Host has offered a 10-year lease with no renewal options, citing their own property strategy. The franchisee’s FA is a 10-year initial term with two 5-year successor terms. The Site Host’s broker has framed the offer as “very generous — most retail leases are 5 years.”

State the response and the cited basis. State whether the franchisee can sign this lease as offered.

Drill 5.3 — Free charging for Site Host employees

The Site Host’s HR director, during a closing meeting, makes a casual request: “Once we go live, can you set it up so our 22 corporate employees get free charging? It’s a perk we can offer as part of our benefits package. We can do it through your back-end somehow.”

State the response and the cited basis. State the next two actions.

Drill 5.4 — The exclusivity request in the lease body

The Site Host’s counsel proposes adding a clause to the body of the lease: “During the term of this Lease, Tenant shall not develop, operate, or franchise any other HiON EV Facility within a five-mile radius of the demised premises. Breach of this provision shall constitute a default under this Lease.”

State the response and the cited basis. State the next two actions.

Drill 5.5 — The “off-the-books” handshake

After the term sheet has been HiON-authorized but before the final lease is signed, the Site Host’s CEO calls the franchisee directly. “Look, our general counsel doesn’t need to see this, but I want to make sure we’re aligned. If we ever decide to sell the property, you’ll work with the buyer in good faith on transferring the lease without invoking any of those HiON corporate rights. Just a handshake between us. You good with that?”

State the response language (verbatim) and the cited basis. State the next two actions.

Drill 5.6 — The Site Host’s mid-lease modification request

Eighteen months into a 20-year lease, the Site Host emails: “We’ve been thinking about reconfiguring the parking lot to add a drive-through lane for our QSR tenant. The reconfiguration would require moving your charging bay about 30 feet to the south. We’d cover the move costs. Can we just sign a simple amendment?”

State the response and the cited basis. State the next two actions.

Drill 5.7 — The lender’s additional lease covenants

The franchisee’s SBA lender informs the franchisee that the lender requires lease-level subordination and notice provisions beyond what the standard Lease Addendum provides. The lender has drafted an SBA Addendum and an estoppel certificate for the Site Host’s signature.

State the franchisee’s response to the lender, the response to the Site Host, and the cited basis. State the sequence of executions and the Partner Portal notifications.

Drill 5.8 — The Site Host’s default-cure proposal

The Site Host issues a default notice on the lease for an alleged signage non-compliance (a faded sign past the 15-day remediation window from M03). The Site Host proposes that the franchisee cure by removing the sign entirely rather than replacing it. The cure proposal would result in non-compliance with §2.4.1 [MANDATORY] signage requirements.

State the response and the cited basis. State the next two actions and the §5.5 [MANDATORY] requirements that apply.

Drill 5.9 — The unauthorized commercial structure

The Site Host’s CFO, sophisticated in commercial real estate, proposes a deal structure: “Instead of straight rent, we’ll contribute $75,000 toward your construction costs in exchange for a 30% revenue share on Gross Sales above a $200,000 annual threshold. Step-up to 40% above $400,000 annual. Tenant improvement contribution treated as standard CRE.” The CFO has prepared a draft term sheet.

State the response and the cited basis. State the next two actions.

Drill 5.10 — The simultaneous-execution sequence

The Site Host’s counsel sends final lease documents for signature. The signature pages are arranged as: (1) main lease body, (2) addenda, (3) Lease Addendum and Collateral Assignment of Lease attached as exhibits with their own signature pages. The Site Host’s general counsel proposes signing the main lease today and the Lease Addendum/Collateral Assignment “in the next day or two — once our principals have a chance to review them in detail.”

State the response and the cited basis. State the next action.

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Section 6 · Common operator errors

6.1 — Signing a lease without the Lease Addendum incorporated

The franchisee, eager to lock down a strong site before another franchisee or competitor approaches the Site Host, signs the lease with the Site Host’s general counsel and intends to “circle back” on the Lease Addendum execution within the week.

• Consequence: §5.4.1 [MANDATORY] violation — “you may not sign any lease or site license that does not incorporate the Lease Addendum.” §5.5 [MANDATORY] violation — the Lease Addendum must be executed simultaneously with the lease. Material breach. The lease is non-compliant; the franchisee has no defensible authorization position even if the term-sheet was previously authorized.
• Discipline: the Lease Addendum executes with the lease — same closing meeting, same signature day, no exceptions. The franchisee does not sign the lease without the Lease Addendum in front of them, executed by the Site Host.

6.2 — Signing a sub-FA-term lease

The franchisee accepts a 5-year initial lease with two 3-year renewal options, reasoning that 11 years total is “close enough” to the 20-year framework the Manual recommends.

• Consequence: §5.4.1 [MANDATORY] violation — every lease must state a term sufficient to support the full FA initial term plus at least one successor term. A 5-year initial + 6-year renewals does not support a 10-year FA initial + 5-year successor = 15-year framework. Shorter terms require exception approval under §1.2.6.
• Discipline: the franchisee maps the lease term against the FA term + at least one successor term before signing. If the Site Host will not offer that term length, the franchisee files an exception request, escalates to FBC, or disqualifies the site.

6.3 — Side letters of any form

The franchisee accepts a “spirit of the deal” understanding that is not in the lease — a courtesy commitment, a reciprocal favor, a handshake.

• Consequence: §5.5 [MANDATORY] violation — any undisclosed agreement that conflicts with, supersedes, or undermines the Lease Addendum or Collateral Assignment is a material breach. Audit-time vulnerability when the Site Host’s CFO leaves, the property is sold, or a default surfaces.
• Discipline: every commitment in the lease. No second layer. If the Site Host insists on a side commitment, decline. If the substance is reasonable, incorporate it into the lease and resubmit for HiON authorization.

6.4 — Conceding Lease Addendum terms during negotiation

The franchisee, faced with the Site Host’s counsel objecting to a specific Lease Addendum clause, agrees to a modification to keep the deal moving — reasoning that “the change is minor.”

• Consequence: §5.5 [MANDATORY] violation — the franchisee is not authorized to waive or vary Lease Addendum terms. The unauthorized modification is itself a material breach. The Manual’s posture: do not concede on behalf of HiON; escalate.
• Discipline: route every objection — minor or major — to HiON. The franchisee’s job is escalation speed, not Addendum defense. HiON works with the Site Host’s counsel directly.

6.5 — Offering or accepting any of the five §5.3 prohibited commitments

The franchisee, in a negotiation push, offers free charging for Site Host employees, an uptime guarantee, an exclusivity ring, a revenue guarantee, or assumes an MSA obligation HiON owes.

• Consequence: §5.3 [MANDATORY] violation. Material breach. The franchisee has created a private contractual exposure that HiON cannot satisfy and that the franchisee cannot fulfill.
• Discipline: memorize the five. Each one is a categorical no. A Site Host who insists on one of them after a clear decline is signaling either a deal-breaking term or a misunderstanding of what the franchisee can authorize — escalate to Site Acquisition Support.

6.6 — Treating the lease as a private document HiON does not need to see

The franchisee, having had the term sheet authorized, executes minor changes to the lease body during a closing push and signs without re-submitting to HiON for final-lease authorization.

• Consequence: §5.4.3 [MANDATORY] violation — every lease must receive HiON written authorization before execution, and material changes to the lease after term-sheet authorization require re-review. The 5-Business-Day post-execution upload does not cure a pre-execution authorization gap.
• Discipline: every final lease goes back to HiON for written authorization before signing — every time, including when the changes look minor. The 10-Business-Day HiON response at the term-sheet stage is the start of the workflow, not the end.

6.7 — Modifying or terminating a lease post-execution without HiON approval

The franchisee, eighteen months in, negotiates a lease amendment with the Site Host (a layout change, a rent adjustment, a notice provision modification) and executes it without HiON’s prior written approval.

• Consequence: §5.4.3 [MANDATORY] violation. Material breach. The amended lease may also conflict with the Lease Addendum, the Collateral Assignment, or the SBA Addendum — creating cascading compliance and lender exposure.
• Discipline: any post-execution material modification routes through HiON for written approval. Submit the proposed amendment via the Partner Portal Site Acquisition Support channel, wait for HiON’s response, and only then execute.

6.8 — Curing a Site Host default in a way inconsistent with the Collateral Assignment

The Site Host issues a default notice on the lease. The franchisee, eager to resolve quickly, agrees to a cure that is inconsistent with the Collateral Assignment’s notice and step-in provisions.

• Consequence: §5.5 [MANDATORY] violation — “you must not cure a default in a way inconsistent with the Collateral Assignment of Lease without consulting us.” Material breach plus operational damage if the cure undermines HiON’s step-in rights.
• Discipline: every default notice triggers an immediate notification to HiON before any cure action. HiON’s Site Acquisition Support and counsel coordinate the cure with the Site Host. The franchisee does not act unilaterally.

6.9 — Failing to upload the executed lease within 5 Business Days

The franchisee executes the lease and Lease Addendum, then files the executed documents in the franchisee’s own filing system and “intends to upload them next week.”

• Consequence: §5.4.3 [MANDATORY] violation — fully executed lease and Lease Addendum must be uploaded to the Partner Portal within 5 Business Days of execution. Audit finding under §5.5 Metrics.
• Discipline: upload happens within the closing-meeting workflow, not on a “next week” schedule. The franchisee’s closing checklist includes the upload as the last step before celebrating the deal.

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Section 7 · Competency assessment

Knowledge check (12 questions; 80% pass; one retake permitted; second failure triggers FBC review)

1. The Lease Addendum (FA Attachment D) is: (a) negotiable on a clause-by-clause basis with HiON’s approval (b) non-negotiable; no lease may be signed without it incorporated (§5.4.1, §5.5) (c) optional for short-term leases under three years (d) substituted by the Collateral Assignment of Lease if the Site Host objects

2. The minimum lease term that satisfies §5.4.1 is: (a) the FA initial term (b) the FA initial term plus at least one successor term (c) 5 years with mutual renewal options (d) 10 years, regardless of FA term structure

3. A Site Host offers free charging for their employees in exchange for a rent concession. The franchisee may: (a) accept; rent concessions are commercial decisions (b) accept if the value is below $1,000 per month (c) decline; charging-price discounts for Site Host employees require HiON written approval (§5.3 [MANDATORY]) (d) accept only for non-Tesla EVs

4. A Site Host proposes adding a 5-mile exclusivity clause to the lease body. The franchisee: (a) accepts if the exclusivity benefits both parties (b) accepts subject to FBC verbal approval (c) declines and escalates; exclusivity or radius rights are a §5.3 [MANDATORY] prohibited commitment (d) accepts but limits the radius to 2 miles

5. The Site Host’s CEO proposes a “handshake” understanding outside the lease. The franchisee: (a) accepts; verbal handshakes are not contractual (b) accepts if the matter is not adverse to the franchisee (c) declines; any side letter, verbal commitment, or undisclosed agreement that conflicts with, supersedes, or undermines the Lease Addendum is a material breach (§5.5 [MANDATORY]) (d) accepts if the Site Host puts it in writing for the franchisee’s records only

6. HiON’s response time on a term sheet or LOI submitted through Partner Portal Site Acquisition Support: (a) 5 Business Days (b) 10 Business Days (§5.4.3) (c) 15 Business Days (d) HiON’s discretion

7. The executed lease and Lease Addendum must be uploaded to the Partner Portal: (a) immediately upon execution (b) within 5 Business Days of execution (§5.4.3) (c) within 10 Business Days of execution (d) on the franchisee’s next monthly report

8. A Site Host objects to a specific provision of the Collateral Assignment of Lease. The correct franchisee action is: (a) negotiate the provision directly with the Site Host’s counsel (b) accept the Site Host’s redline if it is “non-substantive” (c) escalate to FBC and Site Acquisition Support; HiON works with the Site Host’s counsel directly (§5.5) (d) defer the question to closing day and revisit

9. The franchisee may make any post-execution material modification to a fully executed lease: (a) with the Site Host’s consent alone (b) only with HiON prior written approval (§5.4.3 [MANDATORY]) (c) with FBC verbal approval (d) without notice if the modification benefits the franchisee

10. A Site Host issues a default notice on the lease. The franchisee: (a) cures the default before notifying HiON, to preserve the lease (b) accepts the default characterization without dispute (c) notifies HiON immediately and does not cure in a way inconsistent with the Collateral Assignment without consulting HiON (§5.5 [MANDATORY]) (d) refers the matter to the franchisee’s counsel only

11. A commercial structure that involves Site Host capital contribution toward construction costs in exchange for revenue share: (a) is acceptable as standard commercial real estate practice (b) requires FBC verbal authorization (c) requires HiON prior written approval ([APPROVAL REQUIRED] under §5.4.2) (d) is acceptable if the contribution is below $50,000

12. If a Site Host will not accept the Lease Addendum: (a) the franchisee files an exception request under §1.2.6 (b) the franchisee negotiates a substitute addendum (c) the site is not viable; the franchisee disqualifies the lead (§5.5 If the Site Host Objects) (d) the franchisee accepts the Site Host’s substitute terms

Application demonstration — the lease redline review

A 45-minute live exercise. The trainer presents the trainee with a Lease Negotiation Pack containing:

• A draft lease body (15 pages, marked-up)
• A redlined Lease Addendum showing the Site Host’s counsel’s proposed changes (6 redlines — 3 substantive, 3 non-substantive)
• A Site Host counsel email proposing 3 modifications: one §5.3 prohibited commitment, one §5.4.1 lease-provision modification, one §5.5 side-letter proposal
• An SBA lender request for additional lease covenants
• A draft commercial structure including a Site Host capital contribution

The trainee must:

1. Identify the §5.3 prohibited commitment in the counsel email and state the response language
2. Identify the §5.4.1 lease-provision modification that requires correction and state how to address it
3. Identify the §5.5 side-letter proposal and decline appropriately
4. Identify which Lease Addendum redlines are routine (escalate to HiON) vs. which are substantive (require HiON written approval)
5. State the SBA Addendum execution sequence
6. Identify the [APPROVAL REQUIRED] commercial structure element and state the §1.2.6 submission
7. Sequence all of the above into a single Partner Portal Site Acquisition Support submission within the 10-Business-Day HiON response window

Pass criteria: trainee correctly identifies every prohibited commitment, every required-provision gap, every side-letter risk, and every [APPROVAL REQUIRED] item. Trainee correctly escalates the Lease Addendum redlines without attempting to negotiate them directly. Trainee correctly sequences the lender / Lease Addendum / Site Host execution. Citation of section numbers preferred but not required if substantive actions are correct.

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Section 8 · Job aids

Job Aid 8.1 — Division of obligations one-pager

The §5.3 9-row table (Site Host / Franchisee / HiON under MSA) formatted as a single-page reference. The franchisee uses it during every lease negotiation to confirm allocation in the lease language. Highlights the snow/ice/debris row and parking enforcement row as the most frequently mis-allocated.

File: modules/M05-jobaids/M05-division-of-obligations.md

Job Aid 8.2 — The five prohibited commitments card

Pocket card. Front: the §5.3 [MANDATORY] verbatim with the five prohibitions enumerated. Back: the operator-grade rejection language for each — what the franchisee actually says to a Site Host’s counsel when each is proposed.

File: modules/M05-jobaids/M05-prohibited-commitments-card.md

Job Aid 8.3 — Required lease provisions checklist

The eight §5.4.1 required lease provisions as a checklist. The franchisee runs through it against every draft lease before submitting to HiON. Any gap is corrected with the Site Host before submission, or flagged in the submission with an §1.2.6 exception request.

File: modules/M05-jobaids/M05-required-provisions-checklist.md

Job Aid 8.4 — Commercial structure decision tree

Decision tree for selecting between Fixed rent / Revenue share / Hybrid / Easement-license. Inputs: site type, Site Host sophistication, public-sector vs. private, lease vs. license preference. Outputs: recommended structure + considerations + the [APPROVAL REQUIRED] flag for non-standard variants.

File: modules/M05-jobaids/M05-commercial-structure-tree.md

Job Aid 8.5 — Lease approval workflow tracker

A workflow tracker for the §5.4.3 five-step process: term sheet/LOI submitted, HiON response received, final lease submitted, HiON final authorization received, executed lease + Lease Addendum uploaded within 5 Business Days. Each step has its date, the Partner Portal reference, and the responsible party.

File: modules/M05-jobaids/M05-lease-approval-workflow.md

Job Aid 8.6 — Side letter detector

A short checklist the franchisee runs against every closing-stage interaction with the Site Host. Flags: any verbal commitment beyond the lease, any reciprocal favor traded off the lease, any “spirit of the deal” understanding, any MOU or Statement of Intent, any handwritten margin note. The detector is operational — if it flags, the franchisee declines and incorporates into the lease.

File: modules/M05-jobaids/M05-side-letter-detector.md

Job Aid 8.7 — Site Host objection escalation template

A Partner Portal ticket template for the §5.5 four-step escalation. Pre-formatted fields: site, Site Host counsel name and firm, specific objection (with redline attached verbatim), the franchisee’s preliminary view, requested HiON action. The franchisee submits this and stops negotiating until HiON responds.

File: modules/M05-jobaids/M05-objection-escalation-template.md

Job Aid 8.8 — Site Host briefing template (post-authorization)

The Partner Portal Site Host briefing template — what the franchisee walks the Site Host through after the lease is signed. Operational rhythm (service visit cadence, incident contacts, escalation paths, 24/7/365 reality). Used at the Site Host kickoff meeting before construction begins.

File: modules/M05-jobaids/M05-site-host-briefing-template.md

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Section 9 · Facilitator notes

Pacing — 165 minutes (2h 45min, two 10-minute breaks built in)

Time	Section	Notes
0:00–0:10	Opening — the “handshake” gotcha	Read aloud a redacted version of an actual side-letter offer from a Site Host CEO. Ask the room how they would respond. Most operators will hedge — they will not decline cleanly. Sets tone for §4.7.
0:10–0:30	§4.1–4.2 (Division of obligations + prohibited commitments)	Walk the 9-row §5.3 table and the five §5.3 [MANDATORY] prohibited commitments. Distribute Job Aids 8.1, 8.2. Run Drill 5.3 (free charging) and Drill 5.4 (exclusivity in lease body).
0:30–0:55	§4.3 (Required lease provisions)	Walk the 8 §5.4.1 provisions. The term-length provision (item 2) gets the most attention — operators routinely under-negotiate the term. Distribute Job Aid 8.3. Run Drill 5.2 (10-year no-renewal lease).
0:55–1:05	BREAK
1:05–1:25	§4.4 (Commercial structure)	Walk the four standard patterns and the [APPROVAL REQUIRED] variants. Use Job Aid 8.4. Run Drill 5.9 (unauthorized commercial structure with capital contribution + step-up revenue share).
1:25–1:45	§4.5 (Lease approval workflow)	Walk the five-step §5.4.3 workflow. Heaviest emphasis on the 10-Business-Day HiON response and the 5-Business-Day post-execution upload. Distribute Job Aid 8.5. Run Drill 5.10 (simultaneous execution sequence).
1:45–1:55	BREAK
1:55–2:20	§4.6 (Lease Addendum + Collateral Assignment + SBA Addendum)	Heaviest section. Walk the five §5.5 [MANDATORY] standards verbatim. Project the actual Lease Addendum from the FA so trainees see the document. Distribute counsel’s-eye view if the franchisee’s counsel is in the room. Run Drill 5.1 (attorney redlines) and Drill 5.7 (SBA Addendum).
2:20–2:35	§4.7 (Side-letter prohibition)	Distribute Job Aid 8.6. Run Drill 5.5 (off-the-books handshake). Heavy facilitator emphasis — the side-letter test is the integrity test the trainee will be presented most often.
2:35–2:45	§4.8 (When the Site Host objects)	Distribute Job Aid 8.7. Walk the four-step escalation. Run Drill 5.6 (mid-lease modification) and Drill 5.8 (default-cure proposal). Close with the §5.5 “if the Site Host will not accept the Lease Addendum, disqualify” framing.

SME handoffs

• §4.1 (Division of obligations): Joe Lewis (COO) holds the operating allocation expertise across the System. Tony Cuomo (CX) on the brand-execution dimension of Site Host signage rights.
• §4.2 (Prohibited commitments): Jim Frank (CEO) on the strategic rationale — why each of the five is non-negotiable. Joe Lewis on the compliance posture.
• §4.3 (Required provisions): Jim Frank (CEO) per the Training Matrix — content owner on M05 source material. Will Frank (Dev) moderates. The franchisee’s own counsel adds the most value here — invite the trainee’s counsel to attend if possible.
• §4.4 (Commercial structure): Jim Frank (CEO) on the commercial framework. The franchisee’s accountant is the right outside expert for the revenue-share reporting discussion.
• §4.5 (Lease approval workflow): Site Acquisition Support team SME if available; otherwise Jim Frank.
• §4.6 (Lease Addendum + Collateral Assignment + SBA Addendum): Jim Frank (CEO) + HiON’s outside counsel where available. This is the section where institutional counsel adds the most value — consider scheduling a counsel-led segment if the trainee’s deal is in active negotiation.
• §4.7 (Side letter prohibition): Joe Lewis (COO) on enforcement.
• §4.8 (Objection handling): Jim Frank (CEO) on negotiation strategy with Site Host counsel.
• Application Demonstration: Best run as a three-person panel — Jim, Joe Lewis, and outside counsel — with the trainee bringing their own counsel to observe if possible.

Decision drill — model answers

Drill 5.1 — Attorney redlines the Lease Addendum. Response language (verbatim): “I’m not authorized to negotiate the Lease Addendum’s terms. The Addendum is non-negotiable from my side — that’s part of the franchise system standard I operate under. Let me route your specific concerns to HiON’s Site Acquisition Support; they work with Site Host counsel directly on these. I’ll have a contact for your firm in writing within 1 Business Day.” Cited basis: §5.5 [MANDATORY] — franchisee not authorized to waive or vary Lease Addendum terms. §5.5 If the Site Host Objects — escalate to FBC and Site Acquisition Support. Next two actions:

1. Open a Partner Portal ticket under Site Acquisition Support within 1 Business Day. Attach the redlined Addendum verbatim (do not paraphrase the counsel’s objections). State the franchisee’s preliminary view on whether each redline is substantive or non-substantive — but do not commit. Request HiON’s counsel coordinate with the Site Host’s counsel.
2. Notify the FBC of the escalation. Continue the lease negotiation on non-Addendum terms in parallel if appropriate. Do not respond substantively to Site Host counsel on the Addendum content until HiON has responded.

Drill 5.2 — 10-year lease, no renewal options. Response: this lease as offered does not satisfy §5.4.1 item 2. Cited basis: §5.4.1 [MANDATORY] — every lease must state a term sufficient to support the full FA initial term plus at least one successor term. A 10-year initial term with no renewal options supports the FA initial term only, not a successor term. Whether the franchisee can sign this lease: not as offered. The franchisee must either (a) negotiate the lease term to include at least one renewal option at the franchisee’s election that extends through the FA successor term, or (b) file an exception request under §1.2.6 with the supporting reason (Site Host property strategy, etc.) and obtain HiON written approval before signing. Disqualification is also an option if the Site Host will not move. The “very generous compared to retail” framing from the Site Host’s broker is a non-sequitur — the lease term standard is set by the FA depreciation and operating cycle, not by retail market comparables.

Drill 5.3 — Free charging for Site Host employees. Response: decline. Cited basis: §5.3 [MANDATORY] — no commitment to charging-price discounts for the Site Host’s employees or customers that have not been approved by HiON. Also §2.1.3 [MANDATORY] (no on-site payment hardware, no driver payment data collection — there is no franchisee mechanism to apply employee discounts through the franchisee). Pricing is set through the HiON System and the Tesla network integration (§10.2). Next two actions:

1. Explain to the HR director that pricing flows through the Tesla app and the franchisee does not have the ability to apply discounts at a customer-segment level. The accurate framing: “Pricing is set through the HiON System and the Tesla network. We don’t have a mechanism to apply employee discounts at our end — even if we wanted to, the architecture is centralized. If your company wants to subsidize employee charging, the path is a corporate-program arrangement directly with Tesla through their business programs, separate from this lease.”
2. If the HR director persists or the Site Host treats the discount as a condition of the deal, escalate to FBC and Site Acquisition Support. The Manual does not contemplate franchisee-level discounts; if HiON wants to authorize a Site Host accommodation, that’s a §1.2.6 exception decision.

Drill 5.4 — Exclusivity in the lease body. Response: decline. Cited basis: §5.3 [MANDATORY] — no commitment to exclusivity or radius rights. §4.1.2 [MANDATORY] — no representation or commitment of any exclusivity or radius right beyond what is expressly permitted by HiON in the Lease Addendum or separately approved writing. The fact that the Site Host has placed the clause in the lease body rather than as a side letter does not change the prohibition. Next two actions:

1. Reply to the Site Host’s counsel rejecting the clause. Cite §5.3 directly: “This provision creates an exclusivity right I am not authorized to grant — the no-protection rule and the prohibition on exclusivity commitments are part of the franchise system I operate under. We can continue the lease on other commercial terms, but the exclusivity clause has to come out.”
2. Open a Partner Portal ticket under Site Acquisition Support documenting the Site Host’s request and the franchisee’s response. If the Site Host insists, the deal disqualifies; document the disqualification in the pipeline tracker.

Drill 5.5 — Off-the-books handshake. Response language (verbatim): “I appreciate the directness, but I can’t agree to anything outside the lease. The franchise system I operate under prohibits side commitments — verbal or written. If you’d like the lease to address transfer scenarios in a particular way, let’s get the language drafted and routed through my standard approval process so it’s part of the lease and reviewed by HiON. Otherwise the lease as we’ve negotiated it is what governs.” Cited basis: §5.5 [MANDATORY] — no side letter, collateral agreement, or informal understanding that conflicts with, supersedes, or undermines the Lease Addendum or the Collateral Assignment of Lease. Verbal commitments are side letters in substance. Next two actions:

1. Document the Site Host’s offer in a Partner Portal ticket under Site Acquisition Support. Quote the Site Host CEO’s request verbatim. Confirm the franchisee declined. Request HiON’s institutional record of the offer.
2. Continue the lease negotiation on standard terms. Do not allow the Site Host’s offer to influence subsequent negotiations. If the Site Host attempts to invoke the verbal understanding at any future point, the documentation of the decline is the franchisee’s defense.

Drill 5.6 — Mid-lease modification request. Response: decline a casual amendment. Cited basis: §5.4.3 [MANDATORY] — no amendment, termination, or material modification of a fully executed lease without HiON prior written approval. A 30-foot relocation of the charging bay is also §6.3.3 [MANDATORY] — material changes to an authorized site require HiON prior written approval. Next two actions:

1. Reply to the Site Host: “Thanks for the offer to cover move costs. The site relocation needs to be authorized by HiON before we can agree to anything — both the lease amendment and the physical relocation of the charging bay are governed by HiON’s site authorization process. Let me open a request and get HiON Engineering and Design Review involved so we can scope it properly. I’ll have an initial response in 10–15 Business Days.”
2. Open Partner Portal tickets under both Site Acquisition Support (for the lease amendment) and Engineering and Design Review (for the physical relocation). Provide the Site Host’s proposal verbatim, the 30-foot relocation details, the cost-coverage offer, and the franchisee’s preliminary view on operational impact. Do not negotiate the amendment with the Site Host until HiON has authorized.

Drill 5.7 — SBA lender additional covenants. Response to lender: yes, the SBA Addendum is required under §5.5 [MANDATORY]; the franchisee will execute the SBA Addendum in the form attached to the FA as Attachment E and notify HiON of the lender’s identity. The lender’s draft SBA Addendum and estoppel certificate must be reviewed by HiON before the franchisee signs. Response to Site Host: the lender requires additional lease-level provisions; the franchisee will route the lender’s draft estoppel certificate through HiON for review and then to the Site Host for signature. Cited basis: §5.5 [MANDATORY] — SBA Addendum executed where SBA financing applies; lender lease-side obligations notified to HiON. Sequence of executions and notifications:

1. Notify HiON immediately (Partner Portal Site Acquisition Support) of the SBA financing and the lender’s identity
2. Submit the lender’s draft SBA Addendum and estoppel certificate to HiON for review
3. HiON reviews against the FA Attachment E SBA Addendum form and identifies any reconciliation needed
4. The franchisee executes the SBA Addendum (in HiON-approved form) at the same closing as the main lease and Lease Addendum
5. The Site Host signs the estoppel certificate in the form HiON has confirmed
6. All executed documents uploaded to the Partner Portal within 5 Business Days of execution

Drill 5.8 — Site Host’s default-cure proposal that creates §2.4.1 non-compliance. Response: decline the proposed cure path. Cited basis: §5.5 [MANDATORY] — no cure of a default in a way inconsistent with the Collateral Assignment of Lease without consulting HiON; the proposed cure (remove the sign) creates §2.4.1 [MANDATORY] non-compliance which itself is an FA default. Next two actions:

1. Notify HiON immediately of the default notice via Partner Portal Site Acquisition Support. Provide the Site Host’s default notice and the proposed cure verbatim.
2. Propose to the Site Host the §2.4.1-compliant cure (replace the sign within the 15-calendar-day remediation window per §2.4.1; source from the designated vendor per §2.4.2). Confirm to the Site Host that the original sign violation will be cured to HiON standard, and that the proposed “remove the sign” cure would create a different violation the franchisee cannot accept. HiON’s Site Acquisition Support and counsel coordinate with the Site Host’s counsel if the Site Host pushes back.

§5.5 [MANDATORY] requirements that apply: notification to HiON immediately of any default notice; no cure in a way inconsistent with the Collateral Assignment without consulting HiON; preserve all records relating to the default and the cure (§3.4.2).

Drill 5.9 — Unauthorized commercial structure. Response: decline the structure as proposed. Cited basis: §5.4.2 [APPROVAL REQUIRED] — commercial structures involving Site Host capital contributions, revenue guarantees, step-up rent formulas keyed to utilization, or joint ventures require HiON prior written approval. The CFO’s proposal hits three of the four — capital contribution, revenue share above thresholds, step-up keyed to performance. Next two actions:

1. Reply to the CFO: “This structure includes elements I need HiON authorization for before I can agree — specifically the capital contribution and the step-up revenue share. Let me run it through HiON’s commercial review and come back with a position. The standard timeline is 15 Business Days for an authorization decision on a structure like this — your draft term sheet is helpful, I’ll route it through.”
2. Open a Partner Portal ticket under Site Acquisition Support requesting authorization. Attach the CFO’s term sheet. Provide the franchisee’s preliminary view on the structure’s commercial sense. Wait for HiON’s written authorization (or modification) before agreeing to anything with the CFO.

Drill 5.10 — Simultaneous execution. Response: decline staged execution. Cited basis: §5.5 [MANDATORY] — the Lease Addendum must be fully executed simultaneously with, and incorporated into, every lease or site license. §5.4.1 [MANDATORY] — every lease must incorporate the Lease Addendum. A lease signed today without the Lease Addendum executed today is a non-compliant lease. Next action: explain to Site Host counsel that the Lease Addendum and the lease execute together — same meeting, same signature day. The franchisee will accommodate the Site Host’s review timeline by deferring the closing date if needed; the franchisee will not sign the lease in advance of the Lease Addendum. If the Site Host’s principals need additional review time on the Lease Addendum, push the closing date out.

Recommended visual aids

• The actual FA Attachment D Lease Addendum projected during §4.6 (with the franchisee’s own counsel observing if possible)
• The actual FA Attachment E SBA Addendum during §4.6 if the trainee has SBA financing
• A real (redacted) Site Host counsel email with redlines, used during §4.8 + Drill 5.1
• The Partner Portal Site Acquisition Support ticket queue during §4.5

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Section 10 · Cross-references

Modules

• M01 (System and Role Split — §1.1, §2.1, §3.1) — the §2.1.4 24/7/365 requirement from M01 lands here as §5.4.1 lease-provision-3
• M02 (Governance, Manual, Support, Escalation — §1.2, §3.2, §3.3, §3.4) — §1.2.6 exception process is invoked for any required-provision deviation; §3.4 escalation ladder is the dispute path on Lease Addendum objections; audit posture per §3.3 covers lease documentation
• M03 (Brand Promise and Brand Execution — §2.3, §2.4) — §2.3.5 Site Host co-branding hierarchy and §2.4.1 signage rights drive §5.4.1 lease-provision-5; the brand-execution rules are operationalized through the lease’s signage and access provisions
• M04 (Site Acquisition and Feasibility — §4, §5.1–§5.2, §6) — picks up at Stage 6 (Negotiation) where M04 ended; the §6.2.3 FPR discipline carries over to lease negotiation; the §6.3 Site Authorization Submittal includes the proposed lease/term sheet
• M07 (Construction Management and Commissioning — §7) — the lease must accommodate the construction work the franchisee will perform; access provisions and 24/7/365 access standards from this Module enable the build phase
• M11 (Customer Experience, Payments, Driver Support — §10) — the §10.2 driver-pricing discipline reinforces the §5.3 prohibition on unapproved discounts; the §10.4 parking-enforcement framework is operationalized through the lease’s parking-enforcement allocation
• M13 (Finance — §12.4) — revenue-share lease structures require reporting transparency that aligns with §12.4 Gross Sales reporting discipline
• M14 (Compliance, Safety, Insurance, Risk — §13) — §5.4.1 lease-provision-6 (insurance, indemnification, incidents) integrates with §13’s full compliance and insurance framework
• M15 (Lifecycle — §15) — transfer events (§15.3) invoke the Collateral Assignment of Lease; closure/decommissioning (§15.5) invokes the de-identification and remove-rights provisions from §5.4.1 lease-provision-4

External documents

• Operations Manual §5.3–§5.5 (Site Host Responsibilities, Lease Standards, Lease Addendum)
• Franchise Agreement Attachment D (Lease Addendum + Collateral Assignment of Lease)
• Franchise Agreement Attachment E (SBA Addendum, where applicable)
• Operations Manual §2.1.4 (24/7/365 access — referenced)
• Operations Manual §6.2.3 (FPR discipline — referenced; full detail in M04)
• Operations Manual §10.2 (driver pricing — referenced; full detail in M11)
• Partner Portal Site Host briefing template
• Partner Portal Site Acquisition Support channel
• HiON Voice Playbook v1.0 (negotiation voice and tone register — Site & Sales for outreach, Boardroom for term sheets and execution)
• FDD Item 6 (fees); Item 7 (initial investment including lease deposits and pre-opening costs); Item 11 (training); Item 19 (FPR)

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Section 11 · Source verification log

Claim	Manual / FA reference	Status
§5.3 9-row division-of-obligations table	§5.3	verified (table reproduced from primary)
Five §5.3 [MANDATORY] prohibited commitments (uptime / revenue / exclusivity / discounts / MSA assumption)	§5.3	verified (verbatim)
Eight §5.4.1 [MANDATORY] required lease provisions	§5.4.1	verified
Lease Addendum incorporation is non-negotiable	§5.4.1 + §5.5	verified (verbatim quotes in 4.3 and 4.6)
Lease term must support FA initial term + at least one successor	§5.4.1	verified
Four standard commercial structure patterns	§5.4.2	verified
[APPROVAL REQUIRED] for non-standard commercial structures (capital contributions, revenue guarantees, utilization step-ups, joint ventures)	§5.4.2	verified
Five-step §5.4.3 lease approval workflow	§5.4.3	verified
HiON 10-Business-Day response on term sheet/LOI	§5.4.3	verified
5-Business-Day post-execution upload to Partner Portal	§5.4.3	verified
No amendment/termination/material modification without HiON prior written approval	§5.4.3 [MANDATORY]	verified
Five §5.5 [MANDATORY] standards (Addendum execution; Collateral Assignment perfection; SBA Addendum; no side letters; immediate default-notice notification)	§5.5	verified
Side-letter prohibition — verbatim	§5.5 [MANDATORY]	verified
§5.5 four-step Site Host objection escalation	§5.5 If the Site Host Objects	verified
Lease Addendum in FA Attachment D	§5.4.1 + §5.5	referenced — FA primary needed [CONFIRM]
Collateral Assignment of Lease in FA Attachment D	§5.5	referenced — FA primary needed [CONFIRM]
SBA Addendum in FA Attachment E	§5.5	referenced — FA primary needed [CONFIRM]
Disqualification when Site Host will not accept the Lease Addendum	§5.5	verified
§5.5 Metrics — every lease incorporates current Lease Addendum + Collateral Assignment; no undisclosed side letters	§5.5 Metrics	verified

Outstanding unverified items (FA primary)

#	Claim	Primary source needed	Resolver
M05.OUT.01	Specific FA Attachment D text — Lease Addendum + Collateral Assignment of Lease	FA primary	Jim Frank / counsel
M05.OUT.02	Specific FA Attachment E text — SBA Addendum	FA primary	Jim Frank / counsel
M05.OUT.03	FA cure periods invoked on Site Host default notices	FA primary	Jim Frank / counsel
M05.OUT.04	Partner Portal Site Host briefing template current contents	Partner Portal	Will Frank / Tony Cuomo

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Section 12 · Change log

Version	Date	Author	Changes
v0.1	2026-05-19	Claude (draft)	Initial draft against Operations Manual v1.0 Working Draft. All Manual citations verified. Closes Phase B (Site Acquisition & Contracting). Four outstanding items defer to FA primary for the specific text of FA Attachments D and E.