What agreements outline the principal obligations of a Beard Papas franchisee?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
WHEREAS, Franchisee has entered into a Beard Papa's Franchise Agreement (the "Franchise Agreement") for the development and operation of a Beard Papa's Shop (the "Shop" or "Franchised Business") featuring fresh and natural cream puffs and a limited selection of other desserts and beverages and other menu items that Franchisor authorizes (the "Approved Services and Products") under the Licensed Marks (defined below);
Franchisee will operate the Development Shops and all other Beard Papa's Shops in strict compliance with the terms and conditions of each respective Franchise Agreement.
"Franchised Business" refers to and means the Beard Papa's Shop that Franchisee is required to develop, maintain, and operate as part of the System and in accordance with the terms, conditions and obligations set forth in this Agreement and the Operations Manual.
Franchisee agrees that during the Term of this Agreement, Franchisee shall not engage in the following activities (the "Prohibited Activities"): (a) owning and/or having any legal or equitable interest whether, as an individual proprietor, owner, partner, member or shareholder of a Corporate Entity, or, in any similar capacity, in a Competitive Business other than, owning an interest of 3% or less in a publicly traded company that is a Competitive Business; (b) operating, managing, funding and/or performing services whether, as an employee, officer, director, manager, consultant, representative, agent, and/or creditor or, in any similar capacity, for or benefitting a Competitive Business; (c) diverting or attempting to divert any business or customers from Franchisor or, one of Franchisor's affiliates or franchisees; (d) inducing any customer or client of Franchisor, Franchisor's affiliates, franchisees of the System, or, of Franchisee, to any other person or business that is not a Beard Papa's Shop; and/or (e) engaging in any actions, inactions, and/or activities in violation of Articles 6.B. and/or 6.C. of this Agreement (all, individually and, collectively, referred to as the "Prohibited Activities"). Franchisee agrees that if Franchisee were to engage in the Prohibited Activities that such actions would be unfair, would constitute unfair competition and, would cause harm to Franchisor, the System and other Beard Papa's Shop franchisees. Franchisee agrees that the foregoing covenants and obligations shall also apply to Franchisee's Owners and Spouses and that Franchisee's Owners and Spouses shall each execute and deliver to Franchisor the Owner and Spouse Agreement and Guaranty in the form attached to this Agreement as Exhibit 1.
(8) Franchisor, in Franchisor's Reasonable Business Judgment and for any reason or no reason at all, may prohibit Franchisee from soliciting customers located outside Franchisee's Designated Territory;
(4) The transferee shall be bound by all terms and conditions of this Agreement, and each owner of the transferee and their respective spouses shall personally execute the Owner and Spouse Agreement and Guaranty in the form attached to this Agreement as Exhibit 1.
Each owner of the transferee shall also be required to execute such further agreements designated by Franchisor whereby the proposed transferee assumes each and every obligation and responsibility of Franchisee as set forth in this Agreement;
(5) All obligations of Franchisee under this Agreement and the Ancillary Agreements shall be assumed by the transferee, each individual owner of transferee, and their respective spouses in a manner satisfactory to Franchisor;
(6) Franchisee, each Owner, and each Spouse must execute the General Release attached to this Agreement as Exhibit 8 releasing Franchisor, Franchisor's affiliates and Franchisor's past and present officers, directors, shareholders, members, partners, agents, representatives, independent contractors, servants and employees, of any and all claims against Franchisor for matters arising on, or before, the effective date of the Transfer;
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 30–31)
What This Means (2025 FDD)
According to the 2025 Beard Papas Franchise Disclosure Document, the Beard Papa's Franchise Agreement outlines the principal obligations of the franchisee. The Franchise Agreement covers the development and operation of a Beard Papa's Shop featuring fresh and natural cream puffs, a limited selection of other desserts and beverages, and other menu items that Beard Papas authorizes under the Licensed Marks. The franchisee must operate the Beard Papa's Shops in strict compliance with the terms and conditions of each respective Franchise Agreement.
The franchisee must develop, maintain, and operate the Beard Papa's Shop as part of the System and in accordance with the terms, conditions, and obligations set forth in the Franchise Agreement and the Operations Manual. The franchisee's shop facility must be located at a shop location approved by Beard Papas. Beard Papas may prohibit a franchisee from soliciting customers located outside the franchisee's designated territory.
The franchisee also agrees that during the term of the Franchise Agreement, they must not engage in activities such as owning an interest in a competitive business (more than 3% in a publicly traded company), operating or managing a competitive business, diverting customers from Beard Papas, or inducing customers to patronize businesses that are not Beard Papa's Shops. These restrictions also apply to the franchisee's owners and spouses, who must execute an Owner and Spouse Agreement and Guaranty.
If the franchisee transfers the agreement, the transferee must be bound by all terms and conditions of the agreement. Each owner of the transferee and their respective spouses must personally execute the Owner and Spouse Agreement and Guaranty. The transferee must assume all obligations of the franchisee under the agreement and ancillary agreements. The franchisee, each owner, and each spouse must execute a General Release releasing Beard Papas from any claims arising on or before the effective date of the transfer.