What constitutes 'good cause' for Beard Papas to refuse a transfer of ownership?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
Provided Franchisee and each Owner and Spouse, respectively, are in substantial compliance with this Agreement and the Ancillary Agreements, and Franchisor does not elect to exercise Franchisor's right of first refusal as set forth in Article 14.F. below, Franchisor shall not unreasonably withhold its approval of a Transfer by Franchisee or an Owner. The proposed transferee (including such assignee's owner(s) and spouse(s) if the proposed transferee is a Corporate Entity) must be of good moral character, have sufficient business experience, aptitude and financial resources to own and operate a Beard Papa's Shop, and otherwise meet Franchisor's then applicable standards for franchisees as determined by Franchisor in its sole, but reasonable discretion. Furthermore, the proposed transferee and the proposed transferee's owners and spouses may not own or operate, or intend to own or operate, a Competitive Business. Franchisee agrees that Franchisor may condition approval of a Transfer upon Franchisee's satisfaction (either before, or contemporaneously with, the effective date of the Transfer) of the following:
(1) Franchisee must provide written notice to Franchisor of the proposed Transfer of this Agreement at least 30 days prior to the Transfer, and Franchisee must have also satisfied the obligations set forth in Article 14.F. below;
(2) All accrued monetary obligations of Franchisee and all other outstanding obligations to Franchisor and/or Franchisor's affiliates under this Agreement and the Ancillary Agreements must be satisfied in a timely manner, and Franchisee must satisfy all trade, supplier, and vendor accounts and other debts, of whatever nature or kind, in a timely manner;
(3) Franchisee, each Owner, and each Spouse must not be in default or material breach of this Agreement or the Ancillary Agreements;
(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.
Source: Item 23 — RECEIPTS (FDD pages 58–275)
What This Means (2025 FDD)
According to Beard Papas's 2025 Franchise Disclosure Document, Beard Papas will not unreasonably withhold approval of a transfer if the franchisee and each owner/spouse are in substantial compliance with the Franchise Agreement and Ancillary Agreements, and if Beard Papas does not exercise its right of first refusal. However, the proposed transferee must meet certain standards to gain approval.
The proposed transferee (including their owners and spouses, if applicable) must be of good moral character, possess sufficient business experience, aptitude, and financial resources to successfully own and operate a Beard Papa's shop. They must also meet Beard Papa's then-current standards for franchisees, as determined reasonably by Beard Papas. Furthermore, the proposed transferee and their owners/spouses cannot own, operate, or intend to own or operate a Competitive Business.
Beard Papas may also condition approval of a transfer upon the franchisee's satisfaction of several requirements. The franchisee must provide written notice to Beard Papas of the proposed transfer at least 30 days prior to the transfer and satisfy obligations related to Beard Papa's right of first refusal. All accrued monetary obligations and other outstanding debts to Beard Papas and its affiliates must be satisfied in a timely manner. The franchisee, each owner, and each spouse must not be in default or material breach of the Franchise Agreement or Ancillary Agreements. Finally, the transferee must be bound by all terms of the Franchise Agreement, and each owner of the transferee and their respective spouses must personally execute the Owner and Spouse Agreement and Guaranty.