What are the specific terms regarding early termination in Beard Papas' office 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)
According to the 2025 Beard Papas FDD, the terms regarding early termination of the office lease agreement state that upon the termination or expiration of the Franchise Agreement, or in the event of a tenant default, Beard Papas has the option to assume or renew the lease. This includes the right to sublease the premises to another franchisee within the Beard Papa's system. If Beard Papas chooses to assume the lease, they will not be obligated to pay more than two months of past due rent, real estate taxes, and common area maintenance charges.
Furthermore, the agreement specifies that if Beard Papas assumes the lease and subsequently assigns it to an approved franchisee, Beard Papas will not be responsible for any obligations, debts, liabilities, or payments arising after the assignment date. The landlord agrees that the assignment or assumption of the lease by Beard Papas does not require their consent, nor does it require any assignment fees or result in increased rent or other fees.
This arrangement benefits Beard Papas franchisees by providing a safety net in case of franchise termination, allowing the franchisor to maintain the location within the system. It also protects Beard Papas from long-term liabilities if they assign the lease to another franchisee. Franchisees should be aware of these conditions and understand their rights and obligations under the lease agreement, particularly regarding termination and assignment.