Does the Beard Papas agreement require franchisees to acknowledge the potential harm caused by disclosing Know-How to immediate family members?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
You acknowledge that if you did disclose the Know-How to an immediate family member and your immediate family member used the Know-How to engage in activities that, for you, qualify as Prohibited Activities as defined above, that we and the System will be irreparably harmed.
You agree that as between you and us that you are in a better position to know if you permitted and/or provide an immediate family member with access to the Know-How.
Therefore, you agree that you will be presumed to have violated the terms of this Agreement if any member of your immediate family (i) engages in any Prohibited Activities during any period of time during which you are prohibited from engaging in the Prohibited Activities or (ii) uses or discloses the Know-How.
However, you may rebut this presumption by providing evidence conclusively demonstrating that you did not disclose the Know-How nor permit disclosure of the Know-How to the family member.
Source: Item 23 — RECEIPTS (FDD pages 58–275)
What This Means (2025 FDD)
According to the 2025 Beard Papas Franchise Disclosure Document, franchisees acknowledge that disclosing Know-How to immediate family members could cause irreparable harm to Beard Papas and its System. Specifically, the franchisee acknowledges that if they disclose Know-How to an immediate family member, and that family member uses the Know-How in a way that would be considered a Prohibited Activity for the franchisee, it would cause irreparable harm to Beard Papas and the System.
The agreement states that Beard Papas presumes the franchisee violated the agreement if an immediate family member engages in Prohibited Activities or uses/discloses Know-How. Prohibited Activities include owning or having an interest in a Competitive Business, operating or managing a Competitive Business, diverting business or customers from Beard Papas, or violating the Know-How and Confidential Information covenants within the agreement. However, the franchisee can rebut this presumption by providing evidence that they did not disclose or permit the disclosure of Know-How to the family member.
This clause places a significant responsibility on the franchisee to safeguard Beard Papas's Know-How and to control the actions of their immediate family members. It also shifts the burden of proof to the franchisee to demonstrate they were not responsible for any unauthorized disclosure or use of Know-How by family members. This is a notable point for prospective franchisees to consider, as it could lead to disputes and potential legal action if a family member's actions are deemed to be in violation of the agreement.