What must a Beard Papas franchisee acknowledge regarding their resources and business experience?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
the respective Development Period and, the minimum number of cumulative Development Shops (the "Cumulative Development Shops") that must be open and in operation as of the last day of each applicable Development Period.
The Development Schedule is set forth in the Development Information Sheet.
Franchisee agrees that, as to the Development Shops, Franchisee shall meet the requirements of the Development Schedule including, without limitation, requirements as to the number of Development Shops that must be timely developed, established, open, and in operation by Franchisee within the Development Area and as to each respective Development Period.
4.5 REASONABLENESS OF DEVELOPMENT SCHEDULE
Franchisee agrees and represents that it has conducted its own independent investigation and analysis of the prospects for the establishment of Beard Papa's Shops within the Development Area, that Franchisee approves of the Development Schedule as being reasonable and viable, and that Franchisee recognizes that failure to achieve the results described in the Development Schedule will constitute a material breach of this Agreement with time being of the essence.
SECTION 5 OTHER OBLIGATIONS OF FRANCHISEE
5.1 EXECUTION OF FRANCHISE AGREEMENTS
For each Beard Papa's Shop owned, developed and opened for business by the Franchisee in the Development Area, Franchisee must execute Franchisor's then current standard Franchise Agreement. A then current standard Franchise Agreement must be executed by the Franchisee for each and every Development Shop on or before the earlier of: (a) the date Franchisee (subject to Franchisor's approval of the Shop Location) executes a lease for the Shop Location for each respective Development Shop; (b) the date Franchisee (subject to Franchisor's approval of the Shop Location) enters into a purchase agreement for the real estate for the Shop Location for each respective Development Shop; or (c) six months prior to the date that each respective Development Shop must be open and in operation pursuant to the Development Schedule.
5.2 ROYALTY FEES AND OTHER FRANCHISE AGREEMENT FEES ACKNOWLEDGMENT
Franchisee agrees that pursuant to the terms of each respective Franchise Agreement respecting and/or concerning the Development Area and/or this Agreement, that nothing contained in this Agreement shall obviate and/or reduce Franchisee's obligations as set forth in each respective Franchise Agreement including, without limitation, Franchisee's obligations, respectively, to pay royalty and all other fees in accordance with each respective Franchise Agreement. Nothing contained in this Agreement shall modify, reduce or mitigate Franchisee's obligations to Franchisor. The only fee and right contained in the Franchise Agreement that is modified by this Agreement is the fixed one-time initial franchise fee paid by Franchisee to Franchisor at the time of signing the Franchise Agreement, as such initial franchise fee is set forth and defined in Section 4.2 of this Agreement as to the Development Shops.
Source: Item 23 — RECEIPTS (FDD pages 58–275)
What This Means (2025 FDD)
According to the 2025 Beard Papas FDD, a prospective franchisee must acknowledge that they have independently investigated and analyzed the prospects for establishing Beard Papas shops within their designated development area. This includes confirming that the development schedule outlined in the franchise agreement is reasonable and viable. The franchisee acknowledges that not meeting the development schedule constitutes a material breach of the agreement. This means the franchisee is responsible for thoroughly assessing the market potential and their ability to meet the franchisor's expectations for opening and operating new locations.
Furthermore, the FDD states that a proposed transferee (someone to whom the franchisee wants to transfer the business) must have sufficient business experience, aptitude, and financial resources to own and operate a Beard Papa's shop. The franchisor will assess whether the proposed transferee meets the standards for franchisees at their reasonable discretion. This indicates that Beard Papas places importance on the capabilities and resources of those operating their franchises, whether they are new franchisees or transferees.
In the event a franchisee seeks to transfer their Beard Papas franchise to another party, both the franchisee and the transferee must acknowledge that Beard Papas's approval of the transfer only indicates that the transferee meets the criteria established by Beard Papas for franchisees at the time of the transfer. This approval does not constitute a warranty or guarantee by Beard Papas, express or implied, of the suitability of the terms of sale, successful operation, or profitability of the franchised business. This clarifies that Beard Papas is not responsible for the future success of the business after the transfer, and the franchisee and transferee assume the risks associated with the transfer.