Does the Beard Papas Multi-Unit Development Agreement allow for termination by the franchisee under any circumstances?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Sections in Multi-Unit Development Agreement | Summary | |
|---|---|---|---|
| a. | Length of the franchise term | 3 | Varies depending on the number of Shops to be developed and the Development Area. The agreement commences on the effective date and the term automatically expires at the earlier of the opening of the final Shop required for development, or the last day of the calendar month in which the final Shop was required to be open under the Multi-Unit Development Agreement. |
| b. | Renewal or extension of the | Not | There is no renewal of the Multi-Unit Development |
| term | applicable | Agreement. | |
| c. | Requirements for franchisee | Not | There is no renewal of the Multi-Unit Development |
| to renew or extend | applicable | Agreement. | |
| d. | Termination by franchisee | Not applicable | There is no option for your termination of the Multi-Unit Development Agreement. Subject to state law. |
| e. | Termination by franchisor | Not | We can terminate without cause only if you and we |
| without cause | applicable | mutually agree, in writing, to terminate. | |
| f. | Termination by franchisor with "cause" | 3.2 | We may terminate your Multi-Unit Development Agreement with cause. Your Multi-Unit Development Agreement can be terminated by us if: (a) you abandon your obligations under the Multi-Unit Development Agreement; (b) if you for four consecutive months, or any shorter period that indicates an intent by you to discontinue your development of Shops within the Development Area; (c) if you become insolvent or |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 43–51)
What This Means (2025 FDD)
According to the 2025 Beard Papas Franchise Disclosure Document, the Multi-Unit Development Agreement does not provide an option for the franchisee to terminate the agreement, subject to state law. This means that a franchisee entering into a Multi-Unit Development Agreement with Beard Papas is committing to the full term and obligations outlined in the agreement, without a contractual right to unilaterally terminate it.
However, the FDD indicates that Beard Papas can terminate the Multi-Unit Development Agreement with cause under certain conditions. These conditions include abandoning obligations under the agreement, discontinuing development of shops within the Development Area for four consecutive months (or a shorter period indicating intent to discontinue), or becoming insolvent.
Beard Papas can only terminate the agreement without cause if both the franchisee and Beard Papas mutually agree, in writing, to terminate the agreement. This requirement of mutual written consent provides a degree of protection for both parties, ensuring that termination without cause is a deliberate and agreed-upon decision. Prospective franchisees should carefully consider these termination conditions and their implications before entering into a Multi-Unit Development Agreement with Beard Papas.