What constitutes abandonment of obligations under the Beard Papas Multi-Unit Development Agreement that could lead to termination?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Sections in Multi-Unit Development Agreement | Summary | |
|---|---|---|---|
| a. | Length of the franchise term | 3 | Varies depending on the number of Shops to be developed and the Development Area. The agreement commences on the effective date and the term automatically expires at the earlier of the opening of the final Shop required for development, or the last day of the calendar month in which the final Shop was required to be open under the Multi-Unit Development Agreement. |
| b. | Renewal or extension of the | Not | There is no renewal of the Multi-Unit Development |
| term | applicable | Agreement. | |
| c. | Requirements for franchisee | Not | There is no renewal of the Multi-Unit Development |
| to renew or extend | applicable | Agreement. | |
| d. | Termination by franchisee | Not applicable | There is no option for your termination of the Multi-Unit Development Agreement. Subject to state law. |
| e. | Termination by franchisor | Not | We can terminate without cause only if you and we |
| without cause | applicable | mutually agree, in writing, to terminate. | |
| f. | Termination by franchisor with "cause" | 3.2 | We may terminate your Multi-Unit Development Agreement with cause. Your Multi-Unit Development Agreement can be terminated by us if: (a) you abandon your obligations under the Multi-Unit Development Agreement; (b) if you for four consecutive months, or any shorter period that indicates an intent by you to discontinue your development of Shops within the Development Area; (c) if you become insolvent or you are adjudicated bankrupt, or if any action is taken by you, or by others against you, under any insolvency, bankruptcy or reorganization act, or if you make an assignment for the benefit or creditors or a receiver is appointed by you; (d) if you fail to meet your development obligations under the Development Schedule for any single Development Period including, but not limited to, your failure to establish, open and/or maintain the cumulative number of Shops in accordance with Development Schedule; and/or (e) in the event that any one Franchise Agreement is terminated respecting any Shop and/or any other Franchise Agreement |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 43–51)
What This Means (2025 FDD)
According to Beard Papas's 2025 Franchise Disclosure Document, the Multi-Unit Development Agreement can be terminated by Beard Papas if the franchisee abandons their obligations under the agreement. Abandonment is considered a cause for termination.
Additionally, Beard Papas may terminate the agreement if the franchisee discontinues development of Shops within the Development Area for four consecutive months, or any shorter period that indicates an intent to discontinue development. Other causes for termination include insolvency or bankruptcy, failure to meet development obligations under the Development Schedule for any single Development Period (including failing to establish, open, and/or maintain the cumulative number of Shops), and the termination of any single Franchise Agreement respecting any Shop or any other Franchise Agreement with Beard Papas.
These terms are important for a prospective multi-unit franchisee to consider, as they outline specific circumstances that could lead to the termination of their development agreement. Failing to meet development schedules or indications of discontinuing development can have serious repercussions. Franchisees should carefully review the Development Schedule and ensure they have the resources and commitment to meet these obligations to avoid potential termination of the agreement.