Under what circumstances can Beard Papas refuse to permit a transfer of ownership of a franchise?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
any other agreements as Franchisor requires. Such agreements shall supersede this Agreement and its associated agreement in all respects, and the terms of Franchisor's then current agreements may differ from the terms in this Agreement, provided that such agreements shall provide for the same Royalty Fee, Advertising Contributions, and all other financial or monetary obligations established in this Agreement;
- (8) Unless Franchisee has met the requirements of Article 3.E. within the five year period immediately preceding the Transfer, the transferee, at its expense, must improve, modify, refurbish, renovate, remodel, and/or otherwise upgrade Franchisee's Beard Papa's Shop Facility to conform to the then current standards and specifications of Franchisor, and the transferee must complete such improvements, modifications, refurbishments, renovations, remodeling, and/or upgrading within the time period Franchisor reasonably specifies;
- (9) Franchisee, each Owner, and each Spouse shall remain liable for all obligations to Franchisor set forth in this Agreement, except that, following a Transfer that fully complies with this Article 14.C., Franchisee, each Owner, and each Spouse shall not be obligated to pay any Royalty Fees and Advertising Contributions which accrue following the date of the approved Transfer;
Source: Item 23 — RECEIPTS (FDD pages 58–275)
What This Means (2025 FDD)
According to Beard Papas's 2025 Franchise Disclosure Document, Beard Papas can refuse a transfer of ownership if the transferee does not meet certain requirements. Unless the franchisee has met the requirements of Article 3.E. within the five-year period before the transfer, the transferee must improve, modify, refurbish, renovate, remodel, and/or upgrade the Beard Papa's shop to meet the current standards and specifications of Beard Papas. These upgrades must be completed within a timeframe that Beard Papas reasonably specifies.
Additionally, Beard Papas must approve the material terms and conditions of the transfer. Beard Papas must determine, using their Reasonable Business Judgment, that the price and terms of payment are not so burdensome that they would be detrimental to the future operations of the franchised business by the transferee. The transferee's employees, directors, officers, independent contractors, and agents who will have access to confidential information must also execute the Confidentiality Agreement attached as Exhibit 2.
Furthermore, the franchisee must enter into an agreement with Beard Papas to subordinate any obligations of the transferee to make installment payments of the purchase price to the franchisee. This subordination ensures that the transferee's obligations to Beard Papas, including royalty fees and advertising contributions, take precedence. The franchisee must also pay Beard Papas a transfer fee of $15,000.