Does the Beard Papas Franchise Agreement outline any procedures for handling disputes related to the lease agreements?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
nsent 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.
Source: Item 23 — RECEIPTS (FDD pages 58–275)
What This Means (2025 FDD)
According to the 2025 Beard Papas Franchise Disclosure Document, the Franchise Agreement includes stipulations regarding the lease agreement, particularly in relation to the franchisor's rights and obligations under certain conditions. Specifically, in the event of termination or expiration of the Franchise Agreement, or the franchisee's default or failure to exercise an option under the lease, Beard Papas has the option to assume or renew the lease. This includes the right to sublease the premises to another franchisee.
Beard Papas will not be obligated to pay more than two months of past due rent, real estate taxes, and common area maintenance charges if they assume the lease. If Beard Papas assigns the lease to another franchisee approved by the landlord, Beard Papas is not responsible for obligations arising after the assignment date. 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.
Additionally, the Franchise Agreement stipulates that any legal actions arising from the agreement will be conducted on an individual basis, not as a class action, preventing franchisees from consolidating proceedings against Beard Papas with other third parties. While these clauses address Beard Papas's rights regarding the lease, the document does not explicitly detail procedures for handling disputes specifically related to lease agreements between the franchisee and the landlord. A prospective franchisee should seek clarification from Beard Papas regarding dispute resolution processes related to lease agreements.