Does the Beard Papas Franchise Agreement specify any restrictions on subleasing the office space?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
- Landlord and Tenant both agree that Tenant shall not be permitted to transfer, sublease, encumber and/or otherwise assign Tenant's interests in the Lease and/or the Leased Premises without the prior written consent 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.
Source: Item 23 — RECEIPTS (FDD pages 58–275)
What This Means (2025 FDD)
According to the 2025 Beard Papas Franchise Disclosure Document, a franchisee is restricted from subleasing their leased premises without prior written consent from Beard Papas. Specifically, if a franchisee wishes to transfer any interests in the lease or the leased premises, they must request written consent from Beard Papas. If the landlord is inclined to approve such a transfer or assignment, that approval must be conditional upon the franchisee also obtaining written consent from Beard Papas. This provision ensures that Beard Papas maintains control over the locations and operators of its franchises.
This requirement protects Beard Papas' brand and ensures that any sublessee or assignee meets the franchisor's standards. By requiring consent, Beard Papas can vet potential new operators to ensure they are qualified and will uphold the brand's image and operational standards. This is a common practice in franchising, as the franchisor has a vested interest in maintaining consistency and quality across all locations.
Furthermore, the FDD states that in the event of the termination or expiration of the Franchise Agreement, or in other specific situations such as the franchisee's default under the lease, Beard Papas has the option to assume or renew the lease, including the right to sublease to another franchisee within the Beard Papa's system. This clause provides Beard Papas with a mechanism to maintain a presence in a particular location even if the original franchisee is no longer operating the business. This also allows Beard Papas to ensure business continuity by placing another franchisee in the location.