Are advertising contributions included in the payments Beard Papas can recover from a franchisee?

According to Beard Papas's 2025 Franchise Disclosure Document, Beard Papas has the discretion to apply payments received from a franchisee to several types of debts. These include past due royalty fees, advertising contributions, purchases from Beard Papas or its affiliates, interest, or any other debts the franchisee owes to Beard Papas or its affiliates. This means that if a franchisee has outstanding advertising contributions, Beard Papas can use any payment received to offset that debt.

This provision is significant for prospective franchisees as it clarifies how Beard Papas will allocate payments. It ensures that Beard Papas has the authority to manage outstanding debts effectively. Franchisees need to be aware that any payment they make could be applied to advertising contributions if there are any overdue amounts.

Furthermore, the FDD emphasizes that franchisees are not entitled to withhold payments due to Beard Papas under any circumstances. This includes situations where the franchisee believes Beard Papas has not fulfilled its obligations. The franchisee's obligation to make payments is independent of any claims of non-performance by Beard Papas, reinforcing the importance of understanding and adhering to the payment terms outlined in the franchise agreement.