Does the Beard Papas Franchise Agreement include information about operating leases?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
tutes Franchisor's then current Franchise Agreement shall be determined by Franchisor, in Franchisor's exclusive discretion and that, among other things, the Franchise Agreement may be modified from time to time by Franchisor and that reasonable modification and amendments to the Franchise Agreement will not alter Franchisee's obligations under this Agreement.
5.4 COMPLIANCE WITH FRANCHISE AGREEMENTS
Franchisee will operate the Development Shops and all other Beard Papa's Shops in strict compliance with the terms and conditions of each respective Franchise Agreement.
5.5 SITE SELECTION
Franchisee will be solely responsible for selecting the site(s) for the Franchisee's Shop Locations. In accordance with the terms and conditions of each respective Franchise Agreement, Franchisee must obtain Franchisor's prior written approval as to each potential Shop Location selected by Franchisee. Franchisee will retain an experienced commercial real estate broker or salesperson who has sufficient experience in locating Shop sites to locate, acquire, purchase or lease the site for the Franchisee's Development Shops. Accordingly, no provision of this Agreement will be construed or interpreted to impose any obligation upon Franchisor to locate a site for the Development Shops, to assist Franchisee in the selection of a suitable site for the Development Shops, or to provide any assistance to the Franchisee in the purchase or lease of the site for the Development Shops.
5.6 SITE SELECTION CRITERIA
Franchisee will not lease, purchase or otherwise acquire a Shop Locations for the Development Shops until such information as Franchisor may require regarding the proposed site has been provided to Franchisor by Franchisee and has been approved by Franchisor. Information requested by Franchisor may include, without limitation, information regarding the proposed Shop Location as to accessibility, visibility, potential traffic flows, lease terms and other demographic information. Franchisee shall not enter into any lease or purchase agreement with respect to any proposed Shop Location until Franchisor has approved the site.
SECTION 6 TRANSFER OF INTEREST
6.1 BY FRANCHISOR
At all times, Franchisor possesses and maintains the sole and absolute right to transfer and/or assign Franchisor's rights and obligations under this Agreement, in whole and/or in part (for any purpose and in any form of transaction as may be designated and/or elected by Franchisor, in Franchisor's sole discretion) to any person, entity, Corporate Entity and/or third party without the consent of Franchisee and without the approval of Franchisee.
6.2 BY FRANCHISEE
Franchisee shall not Transfer and/or assign this Agreement without the express written consent of Franchisor which Franchisor may withhold in Franchisor's sole discretion and Franchisor's Reasonable Business Judgment. If Franchisee is a Corporate Entity the Owners of Franchisee shall not Transfer their ownership and/or equity interests in Franchisee without the express written consent of Franchisor which Franchisor may withhold in Franchisor's sole discretion and Franchisor's Reasonable Business Judgment. Any Transfer and/or assignment in violation of the foregoing shall constitute a material default of this Agreement and shall result in the immediate and automatic termination of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 58–275)
What This Means (2025 FDD)
According to the 2025 Beard Papas Franchise Disclosure Document, the agreement does address operating leases. The franchisee is responsible for selecting the site for their Beard Papas shop, but must obtain the Franchisor's written approval for the location. The franchisor may request information regarding accessibility, visibility, potential traffic flows and lease terms. The franchisee cannot enter into any lease or purchase agreement until Beard Papas has approved the site.
Beard Papas also has a "Lease Agreement Rider" attached to the agreement as Exhibit 4. The rider stipulates that the franchisee (referred to as Tenant) cannot transfer, sublease, encumber, or assign their interests in the lease without the prior written consent of Beard Papas. If the Landlord is inclined to approve such a transfer or assignment, they must condition their approval upon the franchisee obtaining written consent from Beard Papas.
Furthermore, the Beard Papas Franchise Agreement addresses the scenario where the agreement is terminated or expires. In such cases, Beard Papas has the option to assume or renew the lease, including the right to sublease to another franchisee. If Beard Papas exercises this option, they will not be obligated to pay more than two months of past due rent, real estate taxes, and common area maintenance charges. The landlord's consent is not required for Beard Papas to assume the lease, and no assignment fee or rent increase will result from such an action.