Is Beard Papas considered a third-party beneficiary of the lease rider?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
WHEREAS, Franchisor and Franchisor's successors and assigns (collectively referred to as "Franchisor") is/are intended third party beneficiaries of this Rider.
NOW THEREFORE, Landlord and Tenant acknowledge and agree to the following:
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- This Rider supplements and amends the Lease. In the event of any inconsistency or conflict between the terms of this Rider and the Lease, the terms of this Rider shall prevail. Landlord and Tenant acknowledge that the rights set forth in this Rider may not be reduced, modified or altered without the express written consent of Franchisor.
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- Landlord and Tenant both agree that Tenant shall not be permitted to transfer, sublease, encumber and/or otherwise assign Tenant's interests in the Lease and/or the Leased Premises without the prior written consent of Franchisor. Without limitation to the foregoing, among other things, Tenant agrees that if Tenant wishes to transfer any interests in the Lease or the Leased Premises that Tenant must request the written
consent of Franchisor. If Tenant requests Landlord's consent to Tenant's amendment, transfer and/or assignment of Tenant's interests in the Lease and/or the Leased Premises and if Landlord is inclined to approve of such amendment, transfer and/or assignment that Landlord shall condition Landlord's approval upon Tenant also obtaining written consent from Franchisor.
Source: Item 23 — RECEIPTS (FDD pages 58–275)
What This Means (2025 FDD)
According to the 2025 Beard Papas FDD, the Lease Agreement Rider specifies that Beard Papas is indeed considered a third-party beneficiary. The rider is designed to supplement and modify the terms of the lease agreement between the franchisee (tenant) and the landlord. This gives Beard Papas certain rights and protections related to the leased premises.
Specifically, the Lease Agreement Rider states that Beard Papas and its successors/assigns are intended third-party beneficiaries. This means that Beard Papas has rights under the lease rider, even though they are not a direct party to the lease agreement itself. The rider also stipulates that its terms cannot be reduced, modified, or altered without the express written consent of Beard Papas, ensuring that the franchisor's interests are protected throughout the lease term.
Furthermore, the tenant (franchisee) is restricted from transferring, subleasing, encumbering, or assigning their interests in the lease or the leased premises without obtaining prior written consent from Beard Papas. This provision allows Beard Papas to maintain control over the location of its franchises and to ensure that any transfer or assignment aligns with the brand's standards and strategic interests. If the landlord is inclined to approve a transfer or assignment, that approval is conditional on the tenant also obtaining written consent from Beard Papas.
In summary, the third-party beneficiary status and the restrictions on lease transfers provide Beard Papas with significant control over the leased premises, helping to protect the brand's interests and maintain consistency within the franchise system. This arrangement is common in franchising, as it allows the franchisor to safeguard their brand and operational standards at each location.