What topics are covered under the 'Development Rights' section of the Beard Papas agreement?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
SECTION 2 DEVELOPMENT RIGHTS
2.1 DEVELOPMENT GRANT AND DEVELOPMENT OBLIGATIONS
Franchisor grants to Franchisee the right, and Franchisee accepts the right and undertakes the obligation to develop Beard Papa's Shops, each to be developed, opened and operated by Franchisee within the Development Area (each, a "Development Shop"), provided that Franchisee develops, opens and operates such Development Shops in strict accordance with the Development Schedule, and in accordance with the terms and provisions of each respective Franchise Agreement.
The aggregate number of Development Shops (including the First Development Shop) (collectively, referred to as the "Total Development Shops") that are authorized by this Agreement and required for development, subject to the terms of this Agreement and each respective Franchise Agreement, is set forth and defined in the Development Information Sheet.
The Development Area is and shall constitute the geographic area set forth and identified in the Development Information Sheet.
The Development Information Sheet is attached as Schedule A to this Agreement and is incorporated into and made a part of this Agreement. To be effective the Development Information Sheet must be completed and signed by Franchisor.
Franchisee agrees that Franchisee must: (a) open and commence the operations of each new Development Shop in accordance with the Development Schedule for each respective Development Period, as set forth in this Agreement; and (b) maintain in operation the minimum cumulative number of Development Shops in accordance with the Development Schedule for each respective Development Period. Franchisee agrees that "time is of the essence" with respect to Franchisee's development obligations under this Agreement, and that Franchisee's failure to comply with the Development Schedule is grounds for immediate termination of this Agreement and, any future development rights granted under this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 58–275)
What This Means (2025 FDD)
According to the 2025 Beard Papas Franchise Disclosure Document, Section 2.1 covers the grant of development rights and the obligations of the franchisee. Beard Papas grants the franchisee the right, and the franchisee accepts the obligation, to develop Beard Papa's Shops within a specific Development Area. These shops are referred to as "Development Shops." The franchisee must develop, open, and operate these shops in accordance with a Development Schedule and the terms of each Franchise Agreement. The total number of Development Shops authorized is detailed in the Development Information Sheet.
The Development Area, a key component of the agreement, is geographically defined in the Development Information Sheet, which is attached as Schedule A to the agreement. This sheet must be completed and signed by Beard Papas to be effective. The franchisee is obligated to open and operate new Development Shops according to the Development Schedule for each Development Period and maintain the minimum cumulative number of shops as per the schedule.
Time is considered of the essence regarding the franchisee's development obligations. Failure to comply with the Development Schedule can result in immediate termination of the agreement and any future development rights. This underscores the importance of adhering to the agreed-upon timeline for opening and maintaining Beard Papas locations within the designated area. This section clearly defines the scope and responsibilities associated with the development rights granted to the franchisee, emphasizing the adherence to the Development Schedule and the terms outlined in the Franchise Agreement.