What are the terms of the Beard Papas office lease agreement?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
-------|-----------| | place of business located at (the "Landlord") and, a with a | | | | principal place of business located at (the "Tenant"). | | | | WHEREAS, the lease relates to the following commercial premises (the "Leased Premises"): | | | | | | | | | | | | WHEREAS, Muginoho International, Inc. | (the "Franchisor") is the franchisor of the Beard Papa's | franchise | | system (the "Beard Papa's | | | | Franchise System"); | | | | WHEREAS, Franchisor's mailing and notice address (the "Notice Address") is 11443 South Street Suite | | |
A-7, Cerritos, California 90703;
WHEREAS, the Beard Papa's Franchise System relates to and includes shops featuring fresh and natural cream puffs and a limited selection of other desserts and beverages and other menu items that the Franchisor authorizes under the "Beard Papa's" name and marks (the "Intended Use");
WHEREAS, Tenant is a franchisee of Franchisor pursuant to the terms of a Franchise Agreement entered into between Franchisor and Tenant (the "Franchise Agreement") and the Leased Premises is to be used and operated by Tenant for the purpose of developing, establishing and operating a Beard Papa's Shop in accordance with the Beard Papa's franchise system; and
WHEREAS, Franchisor and Franchisor's successors and assigns (collectively referred to as "Franchisor") is/are intended third party beneficiaries of this Rider.
NOW THEREFORE, Landlord and Tenant acknowledge and agree to the following:
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- This Rider supplements and amends the Lease. In the event of any inconsistency or conflict between the terms of this Rider and the Lease, the terms of this Rider shall prevail. Landlord and Tenant acknowledge that the rights set forth in this Rider may not be reduced, modified or altered without the express written consent of Franchisor.
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- Landlord and Tenant both agree that Tenant shall not be permitted to transfer, sublease, encumber and/or otherwise assign Tenant's interests in the Lease and/or the Leased Premises without the prior written consent of Franchisor. Without limitation to the foregoing, among other things, Tenant agrees that if Tenant wishes to transfer any interests in the Lease or the Leased Premises that Tenant must request the written
consent of Franchisor. If Tenant requests Landlord's consent to Tenant's amendment, transfer and/or assignment of Tenant's interests in the Lease and/or the Leased Premises and if Landlord is inclined to approve of such amendment, transfer and/or assignment that Landlord shall condition Landlord's approval upon Tenant also obtaining written consent from Franchisor.
- 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.
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- Landlord must provide Franchisor, at the same time that Landlord provides Tenant, with a copy of all lease amendments and assignments, and a copy of all letters and notices that Landlord sends to Tenant relating to the Lease or the Premises.
Source: Item 23 — RECEIPTS (FDD pages 58–275)
What This Means (2025 FDD)
According to the 2025 Beard Papas Franchise Disclosure Document, the terms of the office lease agreement are detailed in the Lease Agreement Rider, which supplements and amends the lease. This rider ensures that the rights outlined within it cannot be reduced, modified, or altered without the express written consent of Beard Papas. This provision protects Beard Papas' interests by maintaining control over the locations of its franchises.
Specifically, a Beard Papas franchisee cannot transfer, sublease, encumber, or assign their interests in the lease or the leased premises without prior written consent from Beard Papas. If a franchisee seeks the landlord's consent for any such changes, the landlord must condition their approval on the franchisee also obtaining written consent from Beard Papas. This requirement gives Beard Papas significant oversight over who operates a franchise at a particular location.
Beard Papas also has the option to assume or renew the lease under certain conditions, including termination or expiration of the Franchise Agreement, exercise of the Right of First Refusal, franchisee default, or failure to exercise an option period. In such cases, Beard Papas is not obligated to pay more than two months of past due rent, real estate taxes, and common area maintenance charges. If Beard Papas assumes the lease and subsequently assigns it to another approved franchisee, Beard Papas is not responsible for obligations arising after the assignment date. Landlord consent is not required for assignment or assumption of the lease by Beard Papas, nor can the landlord impose assignment fees or increase rent as a result.
Furthermore, the franchisee is responsible for selecting the site for their Beard Papas shop, subject to Beard Papas' prior written approval. The franchisee must provide Beard Papas with information regarding the proposed site, including accessibility, visibility, traffic flows, and lease terms. The franchisee cannot enter into any lease or purchase agreement until Beard Papas approves the site. This ensures that all locations meet Beard Papas' standards and have the potential for success.