What does section 6 of the Beard Papas agreement cover?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
SECTION 6 TRANSFER OF INTEREST
6.1 BY FRANCHISOR
Source: Item 23 — RECEIPTS (FDD pages 58–275)
What This Means (2025 FDD)
According to the 2025 Beard Papas Franchise Disclosure Document, Section 6 of the agreement pertains to the transfer of interest. Specifically, Section 6.1 addresses transfers by the franchisor. Additionally, Article 6 includes subsections related to restrictive covenants, addressing unfair competition and non-competition obligations both during the term of the agreement and after termination.
During the term of the agreement, franchisees are prohibited from engaging in activities such as owning or having an interest in a competitive business (with a minor exception for owning 3% or less of a publicly traded company), operating or managing a competitive business, diverting customers, or inducing customers to patronize businesses other than Beard Papas shops. These restrictions also apply to the franchisee's owners and spouses, who are required to sign an Owner and Spouse Agreement and Guaranty.
Furthermore, Article 6 outlines the consequences of breaching these restrictive covenants, stating that failure to comply will cause irreparable harm to Beard Papas and its franchisees. Beard Papas is entitled to seek injunctive relief in the event of a violation, and the franchisee waives any claims for damages resulting from such an injunction. While a court may require a bond for the injunctive relief, the amount is capped at $1,000. These remedies are not exclusive and can be combined with other legal or equitable remedies, including specific performance and monetary damages.