Is Beard Papas required to specify and instruct franchisees regarding payment methods for fees?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
. |# Explanatory Notes to Item 6
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.
Note 2: Royalty Fees – The royalty fee is a continuing monthly fee equal to 5% (the "Royalty Rate") of your monthly Gross Sales (the "Royalty Fee"). If any federal, state or local tax other than an income tax is
imposed on the Royalty Fee which we cannot directly, and dollar for dollar, offset against taxes required to be paid under any applicable federal or state laws, you must compensate us in the manner prescribed by us so that the net amount or net effective Royalty Fees received by us is not less than 5% of your Gross Sales.
Note 3: Gross Sales – "Gross Sales" means the total dollar sales from all business and customers of your Shop and includes the total gross amount of revenues and sales from whatever source derived, whether in form of cash, credit, agreements to pay or other consideration including the actual retail value of any goods or services traded, borrowed, or received by you in exchange for any form of non-money consideration (whether or not payment is received at the time of the sale), from or derived by you or any other person or Corporate Entity from business conducted or which started in, on, from or through your Shop and/or your Shop Location, whether such business is conducted in compliance with or in violation of the terms of the Franchise Agreement.
Source: Item 6 — OTHER FEES (FDD pages 13–17)
What This Means (2025 FDD)
According to Beard Papas's 2025 Franchise Disclosure Document, Beard Papas specifies and instructs franchisees regarding payment methods for fees. The FDD states that payment is subject to Beard Papas's specification and instruction, including their election to have all fees automatically drafted from the franchisee's business bank account or automatically debited or charged to their business bank account. Franchisees are required to sign an ACH Authorization Form permitting Beard Papas to electronically debit their designated bank account for payment of all fees payable to them and/or their affiliates. Franchisees must deposit the Gross Sales of their Shop into the designated bank accounts that are subject to Beard Papas's ACH authorization.
Furthermore, franchisees must install and use, at their expense, the pre-authorized payment, point of sale, credit card processing, automatic payment, automated banking, electronic debit and/or electronic funds transfer systems that Beard Papas designates and requires in the operation of their Shop. Franchisees are also responsible for paying all service charges and fees charged to them by their bank so that Beard Papas may electronically debit their bank account.
Several fees, such as the Royalty Fee, Brand Development Fund, and Technology Fee (if implemented), will be debited automatically from the franchisee's bank account by ACH or other means designated by Beard Papas. Other fees, such as the POS System fee, Online Ordering, Customer Rewards, and Gift Cards fee, and the Annual Conference Attendance Fee, are payable to Beard Papas or a designated supplier as specified by Beard Papas.