If a Beard Papas franchisee enters into a Multi-Unit Development Agreement, how do the fees apply?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
Note 1: Type of Fee – The above table describes fees and payments that you must pay to us, our affiliates, or that our affiliates may impose or collect on behalf of a third party. All fees are uniformly imposed for all franchises offered under this Disclosure Document, are recurring, are not refundable, and are payable to us, unless otherwise specified. If you enter into a Multi-Unit Development Agreement or open multiple Shops then these fees shall apply, respectively, to each and every Shop. Payment is subject to our specification and instruction, including, our election to have all fees automatically drafted from your business bank account or automatically debited or charged to your business bank account. You will be required to sign an ACH Authorization Form (Franchise Agreement, Exhibit 7) permitting us to electronically debit your designated bank account for payment of all fees payable to us and/or our affiliates. You must deposit the Gross Sales of your Shop into the designated bank accounts that are subject to our ACH authorization. You must install and use, at your expense, the pre-authorized payment, point of sale, credit card processing, automatic payment, automated banking, electronic debit and/or electronic funds transfer systems that we designate and require in the operation of your Shop. You must pay all service charges and fees charged to you by your bank so that we may electronically debit your bank account.
Source: Item 6 — OTHER FEES (FDD pages 13–17)
What This Means (2025 FDD)
According to Beard Papas's 2025 Franchise Disclosure Document, if a franchisee enters into a Multi-Unit Development Agreement or opens multiple shops, the fees outlined in the document apply to each and every shop. This means that for each Beard Papas location operated under the agreement, the franchisee will be responsible for paying all applicable fees. These fees are uniformly imposed for all franchises offered under the disclosure document, are recurring, and are not refundable.
The fees, as detailed in Item 6, encompass various charges such as a royalty fee of 5% of gross sales, a brand development fund fee of up to 2% of gross sales, and a franchisee-directed local marketing expense of 2% of gross sales. Additional fees may include POS system fees, online ordering/customer rewards/gift card fees, and a technology fee that could reach up to $500 per month. These fees are subject to Beard Papas's specifications and instructions, including the option for automatic drafting from the franchisee's business bank account.
Prospective franchisees should be aware that they will be required to sign an ACH Authorization Form, allowing Beard Papas to electronically debit their designated bank account for all payable fees. Furthermore, franchisees must deposit the gross sales of their shop into designated bank accounts subject to ACH authorization. The franchisee is also responsible for installing and using the pre-authorized payment, point of sale, and electronic funds transfer systems that Beard Papas designates, bearing all associated service charges and fees.
Therefore, a Beard Papas franchisee considering a Multi-Unit Development Agreement must carefully evaluate the financial implications of these recurring fees for each location they plan to open. Understanding the full scope of these financial obligations is crucial for assessing the profitability and sustainability of a multi-unit franchise operation.