What are the renewal options, if any, for Beard Papas' copy machine lease agreement?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon the occurrence of (a) the termination, for any reason, of the Franchise Agreement; (b) the expiration, without renewal, of the Franchise Agreement; (c) Franchisor's exercise of Franchisor's Right of First Refusal granted to Franchisor in the Franchise Agreement; (d) Tenant's default under the terms of the Lease; and/or (e) Tenant's failure to exercise an option period under the terms of the Lease, Tenant and Landlord acknowledge and agree, that:
Franchisor will have the option, but not the obligation, to assume or renew the Lease and the occupancy of the Leased Premises, including the right to sublease to another Franchisee of the Beard Papa's Franchise System, for all or any part of the remaining term of the Lease and, in connection with said assumption, Franchisor will not be obligated to pay to Landlord more than two months past due rent, real estate taxes and common area maintenance charges. In the event Franchisor assumes Tenant's leasehold interest in the Lease pursuant to the terms of this Agreement and subsequently assigns the Lease and its leasehold interest to a Beard Papa's franchisee approved by Landlord, Franchisor shall not be responsible for any obligations, debts, liabilities or payments arising and/or accruing under the Lease after the effective date of such assignment. Landlord agrees that any assignment of the Lease and Tenant's leasehold interests in the Lease by Tenant to Franchisor and/or assumption by Franchisor of the Lease and such leasehold interests shall not require Landlord consent and shall not require any payment of any assignment fee or similar charge or result in any increase in rent or other fees as a result of such assignment and/or assumption.
Source: Item 23 — RECEIPTS (FDD pages 58–275)
What This Means (2025 FDD)
Based on the 2025 Beard Papas Franchise Disclosure Document, the document does not provide specific details regarding renewal options for a copy machine lease agreement. However, it does address the franchisor's option to assume or renew the lease for the premises under certain conditions.
Specifically, Beard Papas has the option to assume or renew the lease if the Franchise Agreement is terminated, expires without renewal, or if the franchisee defaults on the lease or fails to exercise an option period. In such cases, Beard Papas can sublease the premises to another franchisee. If Beard Papas assumes the lease and later assigns it to another franchisee, Beard Papas will not be responsible for obligations arising after the assignment date. The landlord's consent is not required for the assignment or assumption of the lease by Beard Papas, and no assignment fees or rent increases can be imposed as a result.
For a prospective franchisee, this clause offers some security, knowing that Beard Papas has the option to maintain the location should the franchisee's agreement end prematurely. However, because the FDD does not discuss copy machine leases, a prospective franchisee should ask Beard Papas about the terms and conditions of equipment leases, including renewal options and responsibilities, during their due diligence process.