If a Multi-Unit Development Agreement is in place with Beard Papas, what rights are granted to the franchisee?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
your Shop location must be secured by you but subject to our approval.
If we enter into a Multi-Unit Development Agreement with you, we will grant to you the right to develop a mutually agreed upon number of Beard Papa's Shops within a specified Development Area and subject to the agreed upon Development Schedule. The first Shop that you develop under your Multi-Unit Agreement will be governed by the Franchise Agreement. Based on your Development Schedule obligations, you must sign our then current Franchise Agreement for all other Shops authorized by your Multi-Unit Development Agreement.
Grant of Territory
You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control. Under the Franchise Agreement, once you identify a site that we approve for your Shop Location we will designate an area around your site as your designated territory (the "Designated Territory"). There is no minimum size for a designated territory, the scope and size of your Designated Territory will, generally, be a distance of two to five miles from the Shop Location in all directions travelable by road, but may be smaller based on population density, demographics, and geographical boundaries. If your Shop is located within a nontraditional location or a captive market type facility, such as a shopping mall, stadium, amusement park, airport, university, or a similar facility with a captive market, your Designated Territory may be limited to the physical boundaries of the non-traditional location or captive facility. Depending on the demographics and geography we may designate your Designated Territory where your Shop is located at the center of the Designated Territory or where your Shop is located elsewhere within the Designated Territory. We may identify your Designated Territory by zip code, boundary streets, highways, county lines, designated market area, and/or other recognizable demarcations.
If we enter into a Multi-Unit Development, under the Multi-Unit Development Agreement, we will grant to you a Development Area. The size of your Development Area will vary significantly from other franchisees, will be negotiated at the time of signing your Multi-Unit Development Agreement, will depend on your agreed upon Development Schedule, and other factors, including our System development plans, and the nature of the market and demographics in which your Development Area is located.
Relocation
Your right to relocate your Shop is not guaranteed and approval of a request by you to relocate your Shop is completely at our discretion.
Source: Item 12 — TERRITORY (FDD pages 38–40)
What This Means (2025 FDD)
According to Beard Papas's 2025 Franchise Disclosure Document, a Multi-Unit Development Agreement grants specific development rights to the franchisee. If Beard Papas enters into a Multi-Unit Development Agreement, they will grant the franchisee the right to develop a mutually agreed-upon number of Beard Papas shops within a specified Development Area, subject to an agreed-upon Development Schedule. The initial shop developed under this agreement is governed by the standard Franchise Agreement. For all subsequent shops authorized by the Multi-Unit Development Agreement, the franchisee must sign Beard Papas' then-current Franchise Agreement. The size of the Development Area can vary significantly among franchisees and is determined through negotiation, considering the Development Schedule, Beard Papa's system development plans, and market demographics.
It's important to note that the right to develop additional shops under a Multi-Unit Development Agreement is contingent upon the franchisee's timely compliance with the Development Schedule, adherence to the terms of the Multi-Unit Development Agreement, and compliance with all other agreements with Beard Papas and its affiliates, including all Franchise Agreements. Beard Papas' approval of future shop locations and their designated territories will be based on their current site and territory criteria. The designation of a particular Development Area does not guarantee that there are enough suitable sites for shops to meet the Minimum Performance Schedule. Failure to meet the Development Schedule may result in the termination of the Multi-Unit Development Agreement.
Furthermore, franchisees should be aware that they will not receive an exclusive territory, and may face competition from other franchisees, outlets owned by Beard Papas, or other channels of distribution and competitive brands. Also, franchisees are not granted the right to relocate their Development Area. These factors highlight the importance of carefully reviewing the terms of the Multi-Unit Development Agreement and understanding the potential risks and obligations involved.