What costs and expenses can Beard Papas recover from the franchisee in the event of a breach or termination?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee agrees that in the event that an arbitrator in any arbitration proceeding and/or, a court of competent jurisdiction shall issue an award, judgment, decision and/or order finding, holding and/or declaring Franchisee's breach of this Agreement than Franchisor shall also be entitled to the recovery of all reasonable attorney fees, costs and expenses associated with and/or related to such arbitration and/or litigation. Said fees, costs and expenses shall include, but not be limited to, attorney fees, arbitration fees, arbitrator fees, deposition expenses, expert witness fees and filing fees.
Franchisee agrees that Franchisee's failure and/or Franchisee's Owner(s) failure to comply with the restrictive covenants and obligations set forth in this Article 6 will cause irreparable harm to Franchisor and/or other Beard Papa's Shop franchisees for which there is no adequate remedy at law. Franchisee agrees that any violation of these Article 6 covenants and obligations by either Franchisee and/or any Owner(s) will entitle Franchisor to injunctive relief. Franchisee agrees that Franchisor may apply for such injunctive relief, without bond, but upon due notice, in addition to such further and other relief as may be available at equity or law, and the sole remedy of Franchisee, in the event of the entry of such injunction, will be the dissolution of such injunction, if warranted, upon a hearing duly held (all claims for damages by reason of the wrongful issuance of any such injunction being expressly waived hereby). If a court requires the filing of a bond notwithstanding the preceding sentence, the Franchisee and Franchisor agree that the amount of the bond shall not exceed $1,000. Franchisor's remedies under this Article 6.H. are not exclusive of any other, but may be combined with others under this Agreement, or at law or in equity, including injunctive relief, specific performance and recovery of monetary damages.
Source: Item 23 — RECEIPTS (FDD pages 58–275)
What This Means (2025 FDD)
According to Beard Papas's 2025 Franchise Disclosure Document, if an arbitrator or court finds that a franchisee has breached the Franchise Agreement, Beard Papas is entitled to recover all reasonable attorney fees, costs, and expenses associated with the arbitration or litigation. These recoverable fees, costs, and expenses include attorney fees, arbitration fees, arbitrator fees, deposition expenses, expert witness fees, and filing fees. This means that if a franchisee is found to be in breach, they could be responsible for covering Beard Papas's legal costs in addition to any other damages or remedies awarded.
Additionally, the franchisee agrees that failure to comply with restrictive covenants and obligations will cause irreparable harm to Beard Papas and/or other Beard Papas Shop franchisees, for which there is no adequate remedy at law. Beard Papas is entitled to injunctive relief, without bond, but upon due notice. If a court requires the filing of a bond notwithstanding the preceding sentence, the Franchisee and Franchisor agree that the amount of the bond shall not exceed $1,000.
These provisions are fairly standard in franchise agreements, as franchisors seek to protect their brand, system, and other franchisees from damages resulting from a franchisee's breach. Prospective franchisees should carefully consider these potential financial implications and ensure they fully understand their obligations under the Franchise Agreement to avoid such situations. It is advisable to consult with an attorney to fully understand the scope of these provisions and their potential impact.