How are continuing fees (royalties) charged to domestic Beard Papas franchisees?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
ss. Nothing contained in this Article 5.D. shall be interpreted as interfering with and/or negating Franchisor's rights and remedies as set forth in Article 16 and, as otherwise set forth in this Agreement. All rights and remedies of Franchisor are cumulative and shall be interpreted as cumulative to one another.
5.E. APPLICATION OF PAYMENTS
Franchisor has sole discretion to apply any payments received from Franchisee or to offset any indebtedness of Franchisee to Franchisor to any past due indebtedness of Franchisee for Royalty Fees, Advertising Contributions, purchases from Franchisor or its affiliates, interest or any other indebtedness of Franchisee to Franchisor or its affiliates.
5.F. WITHHOLDING PAYMENTS UNLAWFUL
Franchisee agrees that under no circumstance is Franchisee entitled to withhold payments due to Franchisor under this Agreement. Among other things and without limitation to the foregoing, Franchisee expressly agrees that any claim by Franchisee as to the alleged non-performance of Franchisor's obligations shall not permit and/or entitle Franchisee to withhold payments due Franchisor under this Agreement.
ARTICLE 6 RESTRICTIVE COVENANTS AND OBLIGATIONS
**6.A.
Source: Item 23 — RECEIPTS (FDD pages 58–275)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the specifics of how continuing fees (royalties) are charged to Beard Papas franchisees are not detailed in the provided excerpts. The excerpts do mention royalty fees in the context of transfer of ownership, stating that a franchisee, after a fully compliant transfer, is not obligated to pay any Royalty Fees and Advertising Contributions which accrue following the date of the approved Transfer. Additionally, the franchisor has the discretion to apply payments received from the franchisee to any past due indebtedness for Royalty Fees, among other things. The franchisee is not entitled to withhold payments due to the franchisor under any circumstance, including any claim of non-performance by the franchisor.
However, the exact percentage or calculation method for these royalty fees is not specified in the provided excerpts. A prospective franchisee would need to consult the specific Franchise Agreement to understand how these fees are calculated and when they are due.
To gain a comprehensive understanding of the royalty fee structure, a potential Beard Papas franchisee should ask the franchisor for a detailed explanation of how the continuing fees (royalties) are calculated, the frequency of payments, and any potential changes to the royalty structure over the term of the franchise agreement. This information is crucial for assessing the financial viability of the franchise.