Does the Beard Papas Franchise Agreement include any provisions for early termination of the lease agreements?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
nt of Franchisor. Without limitation to the foregoing, among other things, Tenant agrees that if Tenant wishes to transfer any interests in the Lease or the Leased Premises that Tenant must request the written
consent of Franchisor. If Tenant requests Landlord's consent to Tenant's amendment, transfer and/or assignment of Tenant's interests in the Lease and/or the Leased Premises and if Landlord is inclined to approve of such amendment, transfer and/or assignment that Landlord shall condition Landlord's approval upon Tenant also obtaining written consent from Franchisor.
- Upon the occurrence of (a) the termination, for any reason, of the Franchise Agreement; (b) the expiration, without renewal, of the Franchise Agreement; (c) Franchisor's exercise of Franchisor's Right of First Refusal granted to Franchisor in the Franchise Agreement; (d) Tenant's default under the terms of the Lease; and/or (e) Tenant's failure to exercise an option period under the terms of the Lease, Tenant and Landlord acknowledge and agree, that:
Franchisor will have the option, but not the obligation, to assume or renew the Lease and the occupancy of the Leased Premises, including the right to sublease to another Franchisee of the Beard Papa's Franchise System, for all or any part of the remaining term of the Lease and, in connection with said assumption, Franchisor will not be obligated to pay to Landlord more than two months past due rent, real estate taxes and common area maintenance charges. In the event Franchisor assumes Tenant's leasehold interest in the Lease pursuant to the terms of this Agreement and subsequently assigns the Lease and its leasehold interest to a Beard Papa's franchisee approved by Landlord, Franchisor shall not be responsible for any obligations, debts, liabilities or payments arising and/or accruing under the Lease after the effective date of such assignment. Landlord agrees that any assignment of the Lease and Tenant's leasehold interests in the Lease by Tenant to Franchisor and/or assumption by Franchisor of the Lease and such leasehold interests shall not require Landlord consent and shall not require any payment of any assignment fee or similar charge or result in any increase in rent or other fees as a result of such assignment and/or assumption.
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- Landlord must provide Franchisor, at the same time that Landlord provides Tenant, with a copy of all lease amendments and assignments, and a copy of all letters and notices that Landlord sends to Tenant relating to the Lease or the Premises. Subject to the rights set forth in Section "3" of this Rider, Landlord agrees to notify Franchisor by nationally recognized overnight courier at the Notice Address of any default by Tenant under the Lease. Landlord agrees that such notice shall afford Franchisor the option for Franchisor to invoke a cure period whereby Franchisor, upon Franchisor's sole election, shall be granted an additional 15 day period to cure any monetary default by Tenant under the Lease and an additional 30 day period to cure any non-monetary default by Tenant under the Lease. In the event that the non-monetary default cannot reasonably be cured within such period and if diligent efforts to cure promptly commence, then the cure period shall continue as long as such diligent efforts to cure continue, but not beyond 180 days from the date notice is provided.
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Source: Item 23 — RECEIPTS (FDD pages 58–275)
What This Means (2025 FDD)
Based on the 2025 Beard Papas Franchise Disclosure Document, the franchise agreement addresses lease termination scenarios and the franchisor's rights and options under certain conditions. Specifically, if the Franchise Agreement is terminated for any reason, expires without renewal, or if the franchisor exercises their right of first refusal, or if the tenant defaults or fails to exercise an option period, the franchisor has the option to assume or renew the lease.
Beard Papas, as the franchisor, is not obligated to assume the lease but has the option to do so. If Beard Papas chooses to assume the lease, they are only obligated to pay up to two months of past due rent, real estate taxes, and common area maintenance charges. This provides a degree of protection for the franchisor by limiting their financial exposure related to the lease. Furthermore, if Beard Papas assumes the lease and subsequently assigns it to another approved franchisee, Beard Papas is not responsible for any obligations arising after the assignment date.
The lease agreement also stipulates that the landlord's consent is not required for the assignment or assumption of the lease by Beard Papas, and no assignment fees or rent increases can be imposed as a result. This clause ensures that Beard Papas can seamlessly take over the lease without facing additional hurdles or costs. This arrangement benefits both Beard Papas and any incoming franchisee by ensuring continuity of the location and minimizing potential disruptions. The Rider to the lease agreement also states that the tenant (franchisee) cannot transfer, sublease, encumber, or assign their interests in the lease without the prior written consent of Beard Papas.