What is the responsibility of the Managing Owner regarding the operation of the Beard Papas Franchised Business?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
The Managing Owner must possess, maintain and own not less than 25% of the equity and ownership interests in Franchisee.
At all times, the Managing Owner must manage the operations of the Franchised Business.
At all times, Franchisee's Beard Papa's Shop must be under the active, continuing and substantial personal involvement and hands-on supervision of Franchisee's Managing Owner.
The Managing Owner must at all times be actively involved in the operation of the Franchised Business unless Franchisee delegates management functions to an authorized Operating Manager who, among other things, satisfactorily completed Franchisor's Training Program and has otherwise meet the criteria and conditions for qualification as an Operating Manager.
If, at any time, the Franchised Business is not being managed by a Managing Owner or Operating Manager who satisfactorily completed the Training Program, Franchisor is authorized, but is not required, to immediately appoint a manager to maintain the operations of the Franchised Business for and on behalf of Franchisee.
Franchisor's appointment of a manager of the Franchised Business does not relieve Franchisee of its obligations or constitute a waiver of Franchisor's right to terminate the Franchise pursuant to Article 16.
Franchisor is not liable for any debts, losses, costs or expenses incurred in the operations of the Franchised Business or to any creditor of Franchisee for any products, materials, supplies or services purchased by the Franchised Business while it is managed by Franchisor's appointed manager.
Franchisor has the right to charge fees and expenses, as determined by Franchisor, in Franchisor's Reasonable Business Judgment, for management services (the "Management Service Fees").
Source: Item 23 — RECEIPTS (FDD pages 58–275)
What This Means (2025 FDD)
According to Beard Papas's 2025 Franchise Disclosure Document, the Managing Owner has specific responsibilities regarding the operation of the franchised business. The Managing Owner must maintain at least 25% equity and ownership in the franchise. They are also required to manage the operations of the Beard Papas shop.
The FDD emphasizes the need for the active, continuing, and substantial personal involvement and hands-on supervision of the Managing Owner in the Beard Papa's shop. However, the Managing Owner can delegate management functions to an authorized Operating Manager if they have satisfactorily completed Beard Papa's Training Program and meet the criteria for qualification as an Operating Manager.
If the Managing Owner or a qualified Operating Manager is not managing the Franchised Business, Beard Papas has the option to appoint a manager to oversee operations on behalf of the franchisee. However, this does not relieve the franchisee of their obligations, nor does it waive Beard Papas's right to terminate the franchise agreement. Beard Papas is not liable for any debts, losses, or expenses incurred during the time their appointed manager is running the business and can charge fees for these management services.