Does Beard Papas' appointment of a manager relieve the Franchisee of their obligations?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
If, at any time, the Franchised Business is not being managed by a Managing Owner or Operating Manager who satisfactorily completed the Training Program, Franchisor is authorized, but is not required, to immediately appoint a manager to maintain the operations of the Franchised Business for and on behalf of Franchisee.
Franchisor's appointment of a manager of the Franchised Business does not relieve Franchisee of its obligations or constitute a waiver of Franchisor's right to terminate the Franchise pursuant to Article 16.
Franchisor is not liable for any debts, losses, costs or expenses incurred in the operations of the Franchised Business or to any creditor of Franchisee for any products, materials, supplies or services purchased by the Franchised Business while it is managed by Franchisor's appointed manager.
Franchisor has the right to charge fees and expenses, as determined by Franchisor, in Franchisor's Reasonable Business Judgment, for management services (the "Management Service Fees").
Any determination as to whether or not Franchisor may elect to provide management services, if any, and the extent of such services, and/or the discontinuation thereof, shall be exclusively determined by Franchisor in Franchisor's Reasonable Business Judgment.
The Management Service Fee shall be immediately payable upon invoice by us.
Source: Item 23 — RECEIPTS (FDD pages 58–275)
What This Means (2025 FDD)
According to Beard Papas' 2025 Franchise Disclosure Document, if the franchisor appoints a manager to oversee the operations of a franchised business, this action does not relieve the franchisee of their obligations under the franchise agreement. The franchisee remains responsible for fulfilling all contractual duties, and the franchisor retains the right to terminate the franchise agreement if the franchisee fails to meet these obligations. This means that even with a manager in place, the franchisee is still accountable for the performance and compliance of the business.
Furthermore, Beard Papas is not liable for any debts, losses, costs, or expenses incurred during the period when the appointed manager is running the operations. This includes any financial obligations to creditors for products, materials, supplies, or services purchased by the business. The franchisor also has the right to charge fees and expenses for these management services, with the specific amounts determined by Beard Papas based on their reasonable business judgment. These management service fees are payable immediately upon invoicing by the franchisor.
In essence, while Beard Papas may step in to manage a location, the financial and contractual responsibilities continue to rest with the franchisee. This arrangement ensures that the franchisee remains invested in the success of the business, even when direct management is temporarily handled by the franchisor. Prospective franchisees should be aware that they will still be responsible for the franchise even if a manager is appointed by Beard Papas.