Does Beard Papas' approval of the Tenant's lease impose any liability or obligation on the Franchisor?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
tutes Franchisor's then current Franchise Agreement shall be determined by Franchisor, in Franchisor's exclusive discretion and that, among other things, the Franchise Agreement may be modified from time to time by Franchisor and that reasonable modification and amendments to the Franchise Agreement will not alter Franchisee's obligations under this Agreement.
5.4 COMPLIANCE WITH FRANCHISE AGREEMENTS
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.
5.5 SITE SELECTION
Franchisee will be solely responsible for selecting the site(s) for the Franchisee's Shop Locations. In accordance with the terms and conditions of each respective Franchise Agreement, Franchisee must obtain Franchisor's prior written approval as to each potential Shop Location selected by Franchisee. Franchisee will retain an experienced commercial real estate broker or salesperson who has sufficient experience in locating Shop sites to locate, acquire, purchase or lease the site for the Franchisee's Development Shops. Accordingly, no provision of this Agreement will be construed or interpreted to impose any obligation upon Franchisor to locate a site for the Development Shops, to assist Franchisee in the selection of a suitable site for the Development Shops, or to provide any assistance to the Franchisee in the purchase or lease of the site for the Development Shops.
5.6 SITE SELECTION CRITERIA
Franchisee will not lease, purchase or otherwise acquire a Shop Locations for the Development Shops until such information as Franchisor may require regarding the proposed site has been provided to Franchisor by Franchisee and has been approved by Franchisor. Information requested by Franchisor may include, without limitation, information regarding the proposed Shop Location as to accessibility, visibility, potential traffic flows, lease terms and other demographic information. Franchisee shall not enter into any lease or purchase agreement with respect to any proposed Shop Location until Franchisor has approved the site.
SECTION 6 TRANSFER OF INTEREST
6.1 BY FRANCHISOR
At all times, Franchisor possesses and maintains the sole and absolute right to transfer and/or assign Franchisor's rights and obligations under this Agreement, in whole and/or in part (for any purpose and in any form of transaction as may be designated and/or elected by Franchisor, in Franchisor's sole discretion) to any person, entity, Corporate Entity and/or third party without the consent of Franchisee and without the approval of Franchisee.
6.2 BY FRANCHISEE
Franchisee shall not Transfer and/or assign this Agreement without the express written consent of Franchisor which Franchisor may withhold in Franchisor's sole discretion and Franchisor's Reasonable Business Judgment. If Franchisee is a Corporate Entity the Owners of Franchisee shall not Transfer their ownership and/or equity interests in Franchisee without the express written consent of Franchisor which Franchisor may withhold in Franchisor's sole discretion and Franchisor's Reasonable Business Judgment.
Source: Item 23 — RECEIPTS (FDD pages 58–275)
What This Means (2025 FDD)
According to Beard Papas' 2025 Franchise Disclosure Document, the franchisee is responsible for selecting the site for their shop location. The franchisee must obtain Beard Papas' prior written approval of the potential shop location. The franchisee must provide Beard Papas with information regarding the proposed location, such as accessibility, visibility, potential traffic flows, lease terms, and other demographic information. The franchisee cannot enter into any lease or purchase agreement until Beard Papas has approved the site.
Beard Papas does have the option, but not the obligation, to assume or renew the lease and occupancy of the leased premises under certain conditions. These conditions include the termination or expiration of the Franchise Agreement, the franchisee's default under the lease, or the franchisee's failure to exercise an option period. If Beard Papas assumes the lease, they are not obligated to pay the landlord more than two months of past due rent, real estate taxes, and common area maintenance charges. If Beard Papas assumes the lease and subsequently assigns it to another approved franchisee, Beard Papas is not responsible for any obligations arising under the lease after the assignment date.
The lease agreement includes a rider that supplements and amends the lease, giving Beard Papas rights as a third-party beneficiary. The landlord and tenant agree that the tenant cannot transfer, sublease, encumber, or assign their interests in the lease without Beard Papas' prior written consent. If the landlord is inclined to approve any such transfer or assignment, they must condition their approval on the tenant obtaining written consent from Beard Papas. This provision ensures that Beard Papas maintains control over the location and operation of its franchised shops.