How does the Beard Papas Franchise Agreement address potential rent increases during the lease term?

The 2025 Beard Papas Franchise Disclosure Document (FDD) addresses rent increases primarily in the context of the franchisor's right to assume or renew the lease under certain conditions. Specifically, if the franchise agreement terminates, expires without renewal, or if the franchisee defaults on the lease, Beard Papas has the option to assume the lease. In such cases, the landlord agrees that if Beard Papas assumes the lease, there will be no increase in rent or other fees as a result of this assumption. This provision protects Beard Papas from increased costs if they need to take over a lease to ensure continuity of the franchise.

This clause is beneficial for prospective franchisees because it ensures that Beard Papas can maintain control over the location and lease terms without facing increased rental costs in the event of franchisee turnover or other issues. It also provides a degree of security for the franchisee, knowing that Beard Papas has a vested interest in maintaining reasonable lease terms. However, this protection applies specifically when Beard Papas assumes the lease, not necessarily during the ordinary course of the lease term under the franchisee's management.

Beyond this specific scenario, the FDD emphasizes that franchisees are responsible for site selection and lease negotiation, subject to Beard Papas' approval. While Beard Papas must approve the lease terms, the document does not explicitly detail how potential rent increases during the lease term are handled in the initial agreement between the franchisee and the landlord. Franchisees should carefully review lease agreements and negotiate terms that address potential rent escalations to avoid unexpected cost increases during the franchise term. Consulting with a real estate attorney is advisable to ensure adequate protection against unfavorable lease terms.