What happens if a proposed Beard Papas franchise transfer involves substantially all assets or a controlling interest?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
- (7) If the proposed Transfer includes or entails the Transfer of this Agreement, substantially all of the assets of the Franchised Business, a controlling interest in Franchisee, or is one of a series of Transfers which in the aggregate Transfers substantially all of the assets of the Franchised Business or a controlling interest in Franchisee, then, at the election of Franchisor and upon notice from Franchisor to Franchisee, the transferee may be required to execute (and/or, upon Franchisee's request, shall cause all interested parties to execute) for a term ending on the expiration date of the original Term of this Agreement, the then current standard form Franchise Agreement offered to new franchisees of Beard Papa's Shops and any other agreements as Franchisor requires.
Such agreements shall supersede this Agreement and its associated agreement in all respects, and the terms of Franchisor's then current agreements may differ from the terms in this Agreement, provided that such agreements shall provide for the same Royalty Fee, Advertising Contributions, and all other financial or monetary obligations established in this Agreement;
Source: Item 23 — RECEIPTS (FDD pages 58–275)
What This Means (2025 FDD)
According to the 2025 Beard Papas Franchise Disclosure Document, if a proposed transfer includes the transfer of the agreement, substantially all of the assets of the franchised business, or a controlling interest in the franchisee, Beard Papas has the option to require the transferee to execute the then-current standard form franchise agreement. This agreement would be for a term ending on the expiration date of the original agreement.
The new agreement would supersede the original agreement in all respects. However, the terms of the new agreement must provide for the same Royalty Fee, Advertising Contributions, and all other financial or monetary obligations established in the original agreement.
This clause ensures that Beard Papas can update the franchise agreement to its current standards when a significant change in ownership or assets occurs, while protecting the financial interests of both the franchisor and franchisee by maintaining the original financial terms.