When does Beard Papas' franchisor designate and determine the franchisee's designated territory?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
"Designated Territory" refers to and means the territory identified and described in Schedule 1 attached to and made a part of this Agreement or, if Schedule 1 is not completed at the time of signing this Agreement, as Schedule 1 is otherwise completed in accordance with this Agreement. Franchisor, in Franchisor's Reasonable Business Judgment and discretion, shall determine the Designated Territory. If Schedule 1 is not completed and/or is not signed by Franchisor there shall be no Designated Territory.
| Pursuant to and subject to the terms of the Franchise Agreement dated by and between Muginoho International, Inc., as Franchisor, and, as Franchisee (the "Franchise Agreement"), Franchisee has identified a potential area in which Franchisee may seek to identify a potential shop location for Franchisee's Beard Papa's agrees that during the limited period of time that commences on the Site Selection Acknowledgment Date and automatically expires 60 shall not grant to any third following geographic area constituting the Site Selection Area, as such term is defined in the Franchise Agreement: | party the license or right to establish a Beard Papa's | Shop. Based on Franchisee's request, Franchisor calendar days after the Site Selection Acknowledgment Date, that Franchisor Shop Location within the |
|---|---|---|
| Site Selection Area: [Must be completed by Franchisor] | ||
| The terms contained in this Site Selection Acknowledgment shall have the meaning set forth in the | and Article 2 | of the Franchise Agreement. In |
| Franchise Agreement including, but not limited to Article 1 | ||
| the event of any inconsistency or conflict between this Site Selection Acknowledgment and the terms of | ||
| the Franchise Agreement, the terms of the Franchise Agreement shall take precedence and govern. If | ||
| Franchisor does not complete the Site Selection Acknowledgment Date and sign this Site Selection | ||
| Acknowledgment then this Site Select Addendum shall not be effective and there shall be no Site Selection | ||
| Area. As set forth in the Franchise Agreement, among other things, A SITE SELECTION AREA IS NOT | ||
| A | ||
| DESIGNATED TERRITORY, DOES NOT CONSTITUTE THE APPROVAL AS TO ANY | ||
| RESTAURANT LOCATION AND DOES NOT AFFORD FRANCHISEE ANY TERRITORIAL | ||
| RIGHTS. |
Source: Item 23 — RECEIPTS (FDD pages 58–275)
What This Means (2025 FDD)
According to Beard Papas's 2025 Franchise Disclosure Document, the franchisor, Muginoho International, Inc., determines the Designated Territory in its Reasonable Business Judgment and discretion. The Designated Territory is identified and described in Schedule 1 of the Franchise Agreement. If Schedule 1 is not completed when the agreement is signed, it will be completed later in accordance with the agreement. However, if Schedule 1 is not completed and/or signed by the franchisor, there will be no Designated Territory granted to the franchisee.
For a prospective franchisee, this means the grant of a designated territory is not guaranteed. The franchisee needs to ensure that Schedule 1, which defines the territory, is completed and signed by Beard Papas to secure those territorial rights. Without a completed Schedule 1, the franchisee will not have an exclusive territory.
Additionally, a Site Selection Area, identified in a Site Selection Acknowledgment, is not a Designated Territory and does not grant any territorial rights. The Site Selection Acknowledgment is valid for a limited period of 60 calendar days after the Site Selection Acknowledgment Date, during which Beard Papas will not grant another license within the Site Selection Area. This acknowledgment is not effective if the franchisor does not complete and sign it. Therefore, franchisees must be aware of the distinction between a Site Selection Area and a Designated Territory, understanding that the former provides only a temporary and limited protection for site selection, while the latter defines the long-term exclusive operating area.