What rights does Beard Papas have if I default on my lease?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
We do not review the terms of the lease for your Shop Location but require that your landlord acknowledge our rights as set forth in the lease agreement rider attached as Exhibit 4 to the Franchise Agreement (the "Lease Agreement Rider") and that you collaterally assign the lease to us as set forth in the collateral assignment of lease attached as Exhibit 5 to the Franchise Agreement (the "Collateral Assignment of Lease"). We possess the right to disapprove of a proposed lease if the landlord refuses to sign the Lease Agreement Rider in substantially the form set forth in Exhibit 4 to the Franchise Agreement. The Lease Agreement Rider grants certain rights to us, including our right to be notified in the event of a lease default and, potentially, for us to enter the premises of your Shop.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 26–29)
What This Means (2025 FDD)
According to Beard Papas's 2025 Franchise Disclosure Document, Beard Papas requires that the franchisee's landlord acknowledge Beard Papas's rights as outlined in the lease agreement rider, which is attached as Exhibit 4 to the Franchise Agreement. Additionally, the franchisee must collaterally assign the lease to Beard Papas, as detailed in the collateral assignment of lease attached as Exhibit 5 to the Franchise Agreement. Beard Papas retains the right to disapprove of a proposed lease if the landlord refuses to sign the Lease Agreement Rider in the form presented in Exhibit 4.
The Lease Agreement Rider grants Beard Papas specific rights, including the right to be notified if the franchisee defaults on the lease. Furthermore, Beard Papas may have the right to enter the premises of the franchisee's shop. This arrangement ensures that Beard Papas has some control over the location of its franchises and can protect its interests if a franchisee fails to meet their lease obligations.
This is a fairly common practice in franchising, as it allows the franchisor to maintain some control over the location of the business. By having the right to be notified of a lease default and potentially enter the premises, Beard Papas can take steps to mitigate any negative impact on the brand. Prospective franchisees should carefully review Exhibits 4 and 5 of the Franchise Agreement to fully understand the implications of these lease arrangements.