Does the Beard Papas franchise agreement include a clause regarding joint and several liability?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
WHEREAS, you represent to us that you are either: (a) an Owner of Franchisee such that you own or control a legal, equitable or beneficial ownership or equity interest in Franchisee and/or otherwise meet the definition of an "Owner" as set forth in this Agreement; and/or that you are b) the "Spouse" of an Owner of Franchisee;
WHEREAS, you acknowledge that this Agreement will apply to you individually, jointly and severally with all others who sign this Agreement (including if this Agreement is signed in counterparts or electronically among other Owners and Spouses);
WHEREAS, you acknowledge that this Agreement personally obligates you to guarantee Franchisee's obligations to us and obligates you to brand protection, confidentiality and non-competition restrictions and covenants and that you enter into this Agreement to induce us to enter into the Franchise Agreement with Franchisee; and
Source: Item 23 — RECEIPTS (FDD pages 58–275)
What This Means (2025 FDD)
According to the 2025 Beard Papas Franchise Disclosure Document, the agreement includes a clause regarding joint and several liability. Specifically, if the franchisee is a corporation or partnership, any individual who signs the agreement as an owner or spouse of an owner acknowledges that the agreement applies to them individually, jointly, and severally with all other signatories. This means that each individual signing the agreement can be held fully liable for the obligations of the franchise.
This clause is significant because it extends personal liability to the owners and their spouses, even if the franchise is operated through a corporate entity. Beard Papas can pursue any one or all of the individuals who signed the agreement for the full amount of any debt or obligation, regardless of their ownership percentage or involvement in the business's daily operations. This provides Beard Papas with a greater degree of financial security, as they have multiple parties to pursue in case of default or breach of contract.
For a prospective Beard Papas franchisee, this means that signing the agreement carries substantial personal financial risk. It is crucial to understand the full extent of the obligations and potential liabilities before signing. Franchisees should consult with a legal professional to fully understand the implications of joint and several liability and to assess their personal risk exposure. They should also ensure that they have adequate insurance coverage to protect themselves against potential claims.